His employees will work from home for two or three days a week permanently after the pandemic but the new chief of Frasers Property Australia is still confident in the broader office sector as his company embarks on the development of one of Sydney’s most ambitious new office precincts.
Anthony Boyd, who will take over from Rod Fehring as chief executive of one of the country’s biggest development outfits on Thursday after being promoted from chief financial officer, said the company had a policy of complete flexibility and the pandemic had shown people and teams could be more productive working from home than in the office.
“Where we think we will land is people will be back in the office two or three days a week and teams will determine how that will work themselves,” Mr Boyd said.
He is the latest CEO to publicly wade into the debate, which pitched property industry heads against each other at last week’s Australian Financial Review Property Summit, about how and when staff should return to offices after the immediate threat of COVID-19 recedes.
A risk to companies of working from home was that they could draw down too much on their reserves of corporate culture, Mr Boyd said.
“It’s like putting money in the culture bank over five or 10 years with a really progressive culture … we all knew each other really well, and then COVID hits and we go to this new institution and we are drawing money down off this bank account and eventually the money would run out if we just stayed at home the whole time,” he said.
“If we had another crisis in five years and new people would join the organisation who hadn’t formed those personal bonds, we would struggle.”
Mr Boyd said working from home limited employees’ chances to be noticed and promoted as this traditionally happened in the office.
“Sometimes you don’t just have to be doing your job, but doing your job and then putting your hand up for other things, and sometimes that’s hard to do when everyone is winding up a Teams call at the same time,” Mr Boyd said.
“So I think we’ll be at two to three days [working from home], so on average that probably leaves us at capacity of about 60 per cent of what we previously were.”
Lure of central city action
He said in some ways he found people were more productive working from home, with people logging in on time for team meetings and decisions being made efficiently, then and there, rather than being put off as they often were in in-person meetings.
“If a meeting is on Zoom people will say ‘we need to make a call on this and it’s got to be done’,” he said.
The expectation of more flexible work has not, however, dampened Frasers Property’s view of the office market.
The group, with joint venture partner Dexus, is moving ahead with one of Sydney’s biggest office projects, the $2.5 billion Central Place tech hub, which will comprise two towers of up to 39 levels. Next door, tech giant Atlassian is building its new Australian headquarters.
With the design for Central Place decided, the next step is to seek development approval. The group will be looking to pre-lease space in the towers in the next 18 to 24 months.
The office market is one of five asset classes Frasers Property operates in, alongside residential, retail, business parks, industrial and logistics as well as hospitality, although hospitality and industrial are run separately and do not fall under Mr Boyd’s remit.
Most of the group’s business is focused on the residential sector, with about $8.5 billion in the development pipeline, which includes mixed-use projects.
Mr Boyd said the question of whether rents in the Sydney office market would soften depended on what they were offering. He did not expect Central Place to be impacted much.
“Because everything else that will come with it, which is proximity to the busiest train station in Sydney, infrastructure in and around the site and daytime and night-time activation, so it’ll just be a place where people want to be.”
“Businesses will see value in that and say, well if I want to attract staff, what do I have to do to do that?”
Mr Boyd expected not just tech companies but banks and financial services companies traditionally set up at the “Paris-end of the CBD” to be drawn to the new tech precinct at Central.
Central Place will be developed using the new organisational structure Mr Boyd has put in place at Frasers Property. Rather than being based on asset classes such as residential, commercial and retail property, teams will be created, for example, around development, leasing and sales, and work across the various property sectors.
“To get the best outcomes you have to cross-pollinate all of those ideas and that’s hard when you’re talking about balance sheets and profit and losses sheets that are owned by different divisions – it’s hard to force that collaboration,” he said.
“This structure will serve us increasingly well, including on complex projects, where we seek to leverage our cross-sector capabilities to meet demands for a cohesive, whole-of-precinct outcome,” Mr Boyd said.
Mr Boyd joined Frasers Property back in 2005 as group financial controller and has also held the roles of general manager finance and general manager operations in the residential division.
This article originally appeared in The Australian Financial Review. Read the article here.