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How Flexible Workspaces Are Reshaping Australia's Corporate Real Estate Market

As hybrid work models surge, flexible workspaces are reshaping how companies approach office strategy in Australia. Discover the trends driving this shift and what it means for the future of commercial real estate.

31 JULY, 2025

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In This Article

Australia’s corporate real estate landscape is undergoing a profound transformation. Driven by the rise of hybrid work models, economic uncertainty, and a shift in workforce expectations, flexible workspaces — including coworking offices, private serviced offices, and virtual office solutions, are now playing a pivotal role in redefining how companies view and use commercial space.

The Decline of the Traditional Office Footprint

Prior to 2020, long-term leases and expansive central business district (CBD) footprints were the standard. However, as businesses adjusted to remote and hybrid models, many began questioning the value of maintaining large, underutilised offices. This shift has led to a steady decline in demand for traditional leases, particularly in metro CBDs like Sydney and Melbourne. According to the Property Council of Australia, office occupancy across major cities remains well below pre-pandemic levels. Sydney's occupancy sat at 67% in April 2024, while Melbourne recorded 56%.

Instead, companies are choosing smaller, more agile footprints supported by flexible workspace providers like The Executive Centre, that offer short-term leases, scalable options, and plug-and-play solutions.

The Rise of the Hybrid Work Model

The hybrid work model, where employees split time between home, HQ, and third spaces, has been one of the most significant drivers of change in corporate real estate. A 2023 global survey by CBRE found that 87% of companies globally have adopted a hybrid policy, with Australia ahead of the curve in flexible work adoption.

This model redefines the role of the office, from a place for daily work to a collaboration hub. In this context, flexible offices provide:

Short-term leases
Meeting rooms on demand
Scalable team spaces
Shared amenities and tech infrastructure

These features enable organisations to respond to changing headcounts or project-based needs without long-term commitments.

An interior shot of a vibrant Sydney Coworking Area in The Executive Centre, bustling with patrons at tables, fostering a warm and social environment

Decentralisation and the Growth of Suburban Hubs

Another emerging trend is the decentralisation of office demand. With more Australians moving to suburban areas and valuing reduced commutes, there has been a surge in demand for suburban coworking hubs, particularly in areas like Parramatta, Sunshine Coast, and outer Melbourne suburbs.

Flexible workspace operators have responded by expanding beyond CBD towers to strategically placed suburban business parks, enabling businesses to maintain a physical presence closer to where people live and work.

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Benefits for Corporates and Landlords Alike

For corporate tenants, the benefits are clear:

Lower capital expenditure
Reduced lease liability
Ability to scale up or down quickly
Enhanced employee satisfaction

For landlords, partnering with established flexible workspace providers brings diversification, higher fit-out standards, and the ability to attract tenants that may not commit to full-floor leases otherwise. A 2023 Colliers report noted that buildings with integrated flexible space options have 15–20% higher tenant retention compared to those without.

Data-Backed Demand

According to a recent JLL report, up to 30% of all office space could be flexible by 2030. In Australia, flexible workspace occupancy rebounded quickly in 2023–24, especially in Class A buildings, where premium providers offer amenities like event spaces, concierge services, and wellness rooms, which were once only found in corporate headquarters.

Colleagues sitting at a table in the coworking lounge, collaborating on a project

What This Means for the Future

Flexible workspaces are no longer niche. They are now core to Australia’s commercial real estate strategy, offering a sustainable, efficient alternative to traditional leasing.

As we look to the future, expect more corporate real estate portfolios to feature a mix of:

Core headquarters
Flexible satellite hubs
On-demand meeting/event spaces
Virtual office registrations

This diversified approach supports talent mobility, cost efficiency, and long-term adaptability.

Whether you're a property owner, a corporate tenant, or an employee, the message is clear: flexibility is the future. As Australia’s workforce continues to evolve, so too will its office spaces, and those embracing the shift now will be best positioned to lead in the years ahead.

Future-Proof Your Workspace Strategy

At The Executive Centre, we offer flexible office solutions tailored to modern business needs, whether you're downsizing, decentralising, or embracing hybrid work.

Explore our centres across Australia

Get in touch with our team to discuss a solution that fits your business

Or keep learning with our next article: Unlock the Freedom to Work from Anywhere

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