What Seven Office Markets Are Telling Melbourne Tenants About the Future of Their Space

There is a question most Melbourne businesses have not asked themselves before signing a lease.

Not “how much space do we need?” Not “what is the rent?” Not even “what are the incentives?” Those questions matter, but they are all variations of the same underlying assumption: that the office we are moving into will serve the same purpose as the office we are moving out of.

That assumption deserves to be examined before it becomes a ten-year commitment.

Over the past several months, we studied occupier behaviour across seven of the world’s deepest office leasing markets: New York, London, Tokyo, Hong Kong, Singapore, Paris, and San Francisco. We were not looking for market data. We were looking for what the people actually running businesses were saying and doing about their space — the CEOs, the CFOs, the heads of real estate at companies large enough to have made consequential decisions and public enough to have explained them.

What we found was not a debate about whether the office matters. That debate is over. What we found was a clear and consistent answer to a harder question: what is the office actually for now?

The answer is the same in every market. People are coming in to do the work that cannot be done anywhere else. To invent things together. To transfer knowledge from one generation of the organisation to the next. To build the kind of trust that only forms when people are in the same room, reading the same energy, responding to the same moment. Andy Jassy, describing why Amazon brought its people back five days a week, put it plainly: “You need to be joined at the hip with your teammates when inventing and solving hard problems.” Jamie Dimon called it an apprenticeship system. These are not sentimental arguments about office culture. They are descriptions of work that a screen cannot replicate.

AI has sharpened this further, and in a way that most space planning conversations have not yet caught up with. As AI absorbs the routine cognitive load — the first draft, the data analysis, the research pass, the processing work that once filled a floor — what remains in the building is the work that is irreducibly human. Judgement. Synthesis. Creative tension. The conversation that produces something neither party could have arrived at alone.

San Francisco is the clearest illustration of where this leads. The city recorded the worst office collapse of any major market in the world — vacancy above 33% at its worst. It is now recording all-time record leasing demand. The driver is AI companies who have concluded that the more complex and uncertain the work, the more presence it requires. Sam Altman: “The more fragile and nuanced and uncertain a set of ideas are, the more time you need together in person.” The companies building AI are the ones most convinced the office is essential.

The spatial implication of all this is significant and largely unaddressed in how most tenancies are being planned.

The spaces built between 2018 and 2022 were designed for a version of work that has since changed. They were sized for a headcount that AI and hybrid have since reduced. They were configured for a balance between individual work and collective work that no longer reflects how most teams actually operate. And they were designed before anyone understood what the office needed to become: not a place to house people while they process information, but a place to gather people for the work that only they can do together.

HSBC moved out of more than one million square feet in London’s Canary Wharf and into half that space near St Paul’s. Not to save money on rent, though that followed. Because the new building better serves what its people now need from it. Visa relocated in Singapore from older stock into a new building with stronger amenity and sustainability credentials. Amazon expanded aggressively in Tokyo. In every case the logic was the same: the space needs to earn the trip. It needs to be the reason people want to be there, not the place they are required to be.

Melbourne tenants are sitting on an unusual opportunity right now. CBD vacancy is at its highest since 1997. Incentives are at cyclical highs. The development pipeline freezes hard from 2027. The buildings that will be genuinely in demand in three to five years — the ones with large flexible floor plates, strong sustainability credentials, and the amenity that earns the commute — are available today at pricing that will not exist once the market turns.

But the opportunity is only real if you know what you are selecting for.

The question worth asking before viewing a single building is: what do we need our people to do when they are in the room together? Because the space should be the answer to that question. A floor plan designed for processing will not serve a team that comes in to invent. A tenancy configured for density will not serve a culture that comes in to connect. And a lease signed without those answers is a decision made by default rather than by design.

The global evidence points to a specific kind of office emerging as the standard in every market that has worked through this transition: fewer desks, better distributed, with a meaningful proportion of the floor given over to the spaces where the real work now happens. Rooms for thinking together. Settings for the conversations that matter. A social heart that makes the building feel like somewhere worth arriving.

That is not a prediction about the distant future. It is a description of what the best occupiers in the world are already building.

Melbourne will follow.