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"Office workers feel the squeeze as costs are cut"

Sydney Morning Herald 18 February 2003.

Americans like a bit of space around them, Brits don't mind a tight squeeze while Australians are somewhere in the middle.

Cultural issues and building costs are the two biggest factors in determining how much workspace is allocated each worker, according to the latest global office survey by international firm DTZ Research.

While Australian offices stack up slightly above average on a space basis, the most luxurious workspace allocations are to be found in Norway and the US.

Oslo office workers get an average of 25 square metres per person - practically a whole room to themselves - followed closely by most of the US capitals with about 22 sq m per person.

By contrast, city workers in London, Shanghai and Bangkok are making do with less than half these amounts, with a mere 10 sq m each.

According to DTZ Research Australian research manager Marc Pallisco, most Australian office workers get between 16 and 19 sq m each, with Sydney and Melbourne at the tightest end of the scale.

Office costs were usually the second biggest corporate expense, behind staff wages and salaries, Mr Pallisco said. So the global trend of the "ever shrinking" office is alive and well in most countries.

In Europe and North America, where the majority of the top 10 most expensive cities are located, workspace ratios have been falling for the past 15 years.

The increasing number of open plan offices had made it significantly easier for companies to reduce occupancy costs by using less floor space, Mr Pallisco said.

Despite the financial benefits of open-plan offices, the trend has also necessitated a cultural shift.

Open plan, which began in the early 1980s, was initially met with a fear of losing status, Mr Pallisco said, as most companies had previously rewarded seniority with separate or bigger offices.

During the past 20 years this has been gradually worn away, particularly as more chief executives and managing directors were also now being included in open plan environments, he said.

The difference in occupancy costs can be huge.

In Australia, for example, the difference between a 19 sq m workstation in Adelaide and a 16 sq m workstation in Sydney was about $6500 a year per person. Despite Adelaide having bigger workstations, Sydney occupancy costs of up to $750 a sq m made that city much more expensive.

On a global basis, the cost of a Sydney-sized workstation in London's West End would push costs per person up by more than $25,000 a year. While a large New York-sized office in London would push occupancy costs up by a staggering $33,000 a year per person.

Despite Australia's mid-range workspace ratios - which have steadily reduced by up to 20 per cent during the past five years - there was still room for improvement, DTZ building consultancy director Nick Snashall said yesterday.

Mr Snashall forecast workstations would fall to around 14 sq m each throughout Australia in the next few years as companies continue to try to reduce their real estate costs.

This reduction in space is expected to see a mix of methods including "hot desking" where people share workstations; 120-degree workstations, where desks are grouped together with partitions between them; and also mobile workstations which use a minimal amount of floor space, he said.

Recent studies in the UK had found companies could cut floor space requirements by up to 35 per cent by using these latest methods, Mr Snashall said."

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