Employers are chasing talent in office hot spots

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This was published 4 years ago

Employers are chasing talent in office hot spots

By tim Boreham

Melbourne and Sydney rank among the top ten cities globally for their ability to attract a young and talented workforce – and companies are swiftly shifting their property footprint to where these brains are most densely concentrated.

In its recent Innovation Geographies report, agent JLL rates Sydney as number seven for talent, behind locales such as cosmopolitan London, tech-rich San Francisco and the bureaucratic "swamp" of Washington DC. Melbourne ranks number ten, while Sydney is also ranked the world’s 16th most innovative city.

Melbourne could overtake Sydney as having the largest workforce by 2046.

Melbourne could overtake Sydney as having the largest workforce by 2046. Credit: Rebecca Hallas

"With their world-leading concentration of talent, Sydney and Melbourne are the only Asia Pacific cities which make the global top ten," the report says.

"The attractive lifestyle offered by these cities helps to boost demographics, which combined with a robust university infrastructure and highly qualified workforce make them strong contenders on the world stage for talent."

JLL’s local follow-up research for the Melbourne market shows companies in pursuit of talent have relocated to six suburbs with two rare attributes: half of their workforce is aged between 20 and 39, while 45 per cent of the populace holds at least a bachelor’s degree.

The favoured locations include Cremorne – also known as Melbourne’s Silicon Valley – as well as Abbotsford, South Yarra, Southbank, North Melbourne and West Melbourne.

In Sydney, the suburbs meeting the age and education criteria include Surry Hills, Redfern and Darlinghurst in the inner east and the creative and tech hub of Pyrmont and Darling Harbour.

While the firm is still analysing the Sydney and Brisbane trends, its Melbourne research shows the chase for talent has created "unprecedented" demand for office space in the inner east.

"Developers are now looking at that location because of its success as a technology hub,"JLL head of research (Victoria) Annabel McFarlane, said.

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"A lot of firms seeking to move into that area want to tap into that young demographic."

But further east, Mulgrave is leading the charge with 73,300 square metres of net space absorbed over the last five years, compared with around 33,450 sq m for the Yarra district, which includes Cremorne.

The battle for the brains is also reflected in the property activities of the universities.

In comparison, the traditional office precinct of St Kilda Road had net excess space of close to 40,000 sq m.

Mulgrave’s new popularity is attributed to the emergence to the Monash University and its research facilities at nearby Clayton, which has attracted "knowledge" companies, especially in the pharmaceutical and engineering sectors.

For instance, car maker Nissan recently signed up for 12,000 sq m of space for its new national headquarters in Wellington Road.

The precinct also houses the Monash Medical Centre, a CSIRO research centre and the Synchrotron facility.

The battle for the brains is also reflected in the property activities of the universities, which have aggressively taken up CBD and inner city space.

The University of Melbourne has taken up 6000 sq m in Carlton, on the site of the old Royal Women’s Hospital, and is building a new school of engineering at Fishermans Bend.

JLL says that as the home to seven universities and the host to five more, Melbourne will overtake Sydney as having the largest workforce by 2046.

Meanwhile, Australian Bureau of Statistics data shows the western Sydney suburb of Rhodes as the most educated across all age groups, with 27 per cent of adults holding a postgraduate degree. The precinct’s transition from odoriferous industrial precinct to the home of 'Rhodes scholars' is attributed to the high proportion of well-educated residents from overseas.

Rhodes pipped Westmead, home to one of the country’s biggest teaching hospitals, on 26 per cent.
Property demographers are also keeping a sharp eye on Darlington, opposite Sydney University, where more than 50 per cent of the residents hold a bachelor-level degree.

According to the JLL global report, the top "talent" cities have seen average rental growth of 1.8 per cent, compared with the baseline average of around one per cent.

"Put simply, the top performing cities … have recorded the fastest, most vigorous office rental growth over the last past decade and are attracting a higher portion of real estate capital."

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