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The bigger a company the less space office workers have.

Colliers International’s latest Workplace Report shows Auckland CBD office workers on average toil away in 15.6 sq m of space each, down more than two square metres on what they had four years ago and a whopping 25 per cent on a decade ago.

The fourth survey led by Colliers International’s research director Alan McMahon looks at offices leased in the past three years and covers more than 126,000 sq m – 10 per cent of total Auckland CBD office stock – and more than 8000 employees – about 10 per cent of the total number of CBD office workers.

McMahon says a pile of literature is being written and debate taking place about the design of workplaces. “Creating an office that helps attract and retain staff, helps communication without being uncomfortably distracting or noisy, ticks the green boxes, but keeps costs down is a complex issue. One key indicator is the space allocated to office workers.”

Colliers International has used the space allocation research data to also calculate and compare costs among various industries, quality of buildings, sizes of companies and locations within Auckland’s CBD.

In Colliers’ first survey done in 1998 office workers had 21 sq m of space each. This dropped to 18.7 sq m in 2000, 17.7 sq m in 2004 and 15.6 sq m this year. The area measured in leases includes reception areas, meeting and board rooms and if they are excluded office density can drop to between eight sq m and 10 sq m a person.

McMahon says the rapidly dropping amount of space office staff work in reflects the ability of modern buildings to accommodate more people, made possible by better design, services and open plan layouts.

Colliers International’s survey shows the better the quality of building, the less space office workers have, from 13 sq m each in premium grade buildings to 20.1 sq m in C-grade premises. And the more staff a company has the less space they persevere in. People working in businesses with up to 20 employees average up to 21.9 sq m of space each, while those in organisations with more than 200 staff graft in 13.7 sq m of space each.

“There are two reasons for this,” says McMahon. “Firstly, lower grade properties are just not capable of accommodating the same number of people because services are not up to the job, floorplates are not large enough and there are not enough toilets, fire escapes and stairwells. Secondly, as costs in C-grade buildings are less than half the cost of a square metre in a premium grade property, there is less pressure on businesses in the lower grade buildings to use the space efficiently.”

Few people now have their own offices. In the 1998 survey 23 per cent of workers had their own office, dropping to 16 per cent in 2000, 10.1 per cent in 2004 and it has now fallen to only 3.5 per cent – about one in 30 people. In companies employing more than 200 people just 1.9 per cent of staff have their own office – less than one in 50 people.

Legal and consulting firms have the biggest number of people with their own office at 8.7 per cent, while only a paltry one per cent of employees in call centres have their own office, almost matched by 1.4 per cent of staff in the IT sector.

McMahon says overall property and building services staff have the least space. “Just 7.4 per cent of employees have their own office, meaning the other 92.6 per cent of employees in these companies slog away in significantly more cramped conditions than call centre workers.”

CBD precincts Britomart and Quay Park have the most workers per square metre. Office staff working in Britomart buildings have 12.7 sq m each and at Quay Park 14 sq m each. McMahon says this reflects the move by big companies to those precincts, including some call centres.

Staff in call centres and property and building services companies are crammed together plugging away in 13.4 sq m and 12.8 sq m of space each. Symonds Street office workers are the best off; they strive in 22.6 sq m of space each. “Unsurprisingly the amount of space each office worker has increases as the quality of the building decreases,” says McMahon.

“Smaller companies often inherit the previous occupant’s fitout and don’t have the same incentive to rationalise the space larger firms have.”

He says there has been a lot of academic debate on the ability of staff to lift their productivity in high quality, open plan intensively occupied offices. “Some commentators suggest they are just a cost cutting measure dressed up as an environmental or productivity improvement strategy, but evidence shows improved communication among staff in open plan offices leads to better and more effective work.”

Despite a contraction in space for Auckland’s CBD office employees, the annual cost of their working area has risen by more than 31 per cent to $8065. McMahon says the total occupancy per square metre rose nearly 38% to $477 in the past four years. Consulting and legal firms, who mainly have their businesses in high quality buildings, have the highest total occupancy costs, at $9703 a person and $566 a square metre.

Statistics New Zealand estimates more than 82,000 people work in Auckland’s CBD – a 10.6 per cent rise in the past four years. Forecasts predict employees numbers will continue to grow strongly, reaching 89,000 by 2012.

“Using Auckland CBD’s average office density of 15.6 sq m a person suggests that more than 100,000 sq m of new space will be needed to house the additional workers in the next four years,” says McMahon.

“While several substantial new CBD office buildings are planned, financing them has become difficult and more expensive. Financiers have toughened up and often require a new building to be 80 per cent to 90 per cent leased before lending money. While tenant demand is still robust, it is not an easy task to pre-lease a substantial new CBD building to these levels.

McMahon says despite market clamouring, it is possible there won’t be enough CBD space built in the next few years even though the working area provided for employees is dropping. “Some growth might be siphoned off to the CBD’s fringe areas, where a combination of modest land prices and smaller buildings make development feasible, despite the stringent conditions set by financiers.”

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