Episode 160 | Working from Home Movement: Has Covid accelerated the inevitable | Soren Trampedach, Work Club Global

Work Club founder discusses the future of remote working, and shared office spaces.
Soren Trampedach is the founder, chairman and CEO of Work Club. Work Club is an established boutique solution to accommodate for modern day work space and place challenges. In recent times Work Club has shifted to providing consultancy on workplace optimisation to industry leaders such as Google, Deloitte and Facebook. With his remarkable insights and knowledge on efficient work spaces, Soren predicts what workplaces of the future will look like and how Covid has sped up what might be the inevitable.
Here’s what we covered:

• What will work look like in 12 months in comparison to the last 12 months?

• Will we end up going back to the old work routine?

• What is pro-working and will it grow?

• Will attitudes in Melbourne be exacerbated due to extended lockdown?

• What is happening across the globe in terms of work patterns and who can we learn from?

• How will developers shift what they make and sell?

• What are landlords thinking about their older buildings?

• Will co-working expand nationally? And what areas will need it the most?

• How WeWork rose and fell and what it means for the alternative working industry?

RELEVANT EPISODES:
Episode 145 | Lucinda Hartley
Suburb Trends August 2020
Episode 104 | Adam Hirst

GUEST LINKS:
Facebook: https://www.facebook.com/workclubglobal/
Instagram: https://www.instagram.com/workclubglobal/
LinkedIn: https://www.linkedin.com/company/work-club-sydney

HOST LINKS:
Looking for a Sydney Buyers Agent? www.gooddeeds.com.au
Work with Veronica: https://linktr.ee/veronicamorgan

Looking for a Mortgage Broker? www.wealthful.com.au
Work with Chris: hello@wealthful.com.au

Send in your questions to: questions@theelephantintheroom.com.au

EPISODE TRANSCRIPT:
Please note that this has been transcribed by half-human-half-robot, so brace yourself for typos and the odd bit of weirdness…
This episode was recorded in November, 2020.

Veronica Morgan: Coworking spaces have been steadily gaining popularity over recent years and offering small and large businesses alike, greater flexibility in the way they accommodate their teams, changing the look and feel of offices and the way we work forever. And then along came COVID to really accelerate the future of work. How exactly has the pandemic disrupted the disruptor what's changing in the co-working space and how will this ultimately impact the way we live?

Veronica Morgan: Welcome to the elephant in the room. This is the podcast where we love to talk about the big things in property that never usually get talked about. I'm Veronica Morgan, real estate agent buyer's agent co-host of Foxtel's location, location, location, Australia, and author of auction ready. And I'm Chris Bates mortgage broker. Before we get started, I need to let you know that nothing we say on here can be taken as personal advice. We always recommend you engage in the services of a professional. Don't forget that you can access the transcript for this episode on the website, as well as download our free fall or forecast report, which experts can you trust to get it right? The elephant in the room.com did I, you,

Veronica Morgan: The work we choose to do the way we do that work, where we do it, and let's not forget how much we get paid to do it all, have a great impact on the way we live. And of course our property choices today, we're diving into the subject of the future of work with Soren tramp deck. Is that how I say your name?

Soren Tramperde...: That's pretty good.

Veronica Morgan: Well, thank you found a chairman and CEO of work club Soren created work clubs to provide established businesses with a unique boutique solution to the challenges posed by the rapid pace of change in business. And he has a fascination with the future of work and has recently taken work clubs from flexible workplace operator to work space consultants, specializing in building better connected to human ecosystems. He's a thought leader on innovation and the future work. He's got an impressive 20 year career in leadership positions and continues to provide consultancy on workplace optimization to industry leaders, such as Google Deloitte NAB standard charters, bank and Facebook. So he's got an incredible global perspective as well. So that's going to be make for an interesting conversation today. Having lived and worked in Denmark, England, Germany, Ireland, Spain, China, Hong Kong, Japan, and now Australia. Thank you so much for joining us Soren.

Chris Bates: Thank you, sir. And really appreciate you coming on today. I guess. The future of works. It's the big broad topic, but in your mind, what is the future of work today and very interested to know how's that actually changed over, let's say the last 12 months, if at all,

Soren Tramperde...: I think it's, it's accelerating and I don't think there is we entirely know what that's gonna look like. My guess is that, you know, what COVID has done is really shown that people can work from home to some extent my guess going forward, you're going to see a hybrid of solutions, which are some companies preferring still to work in CBD and wanting most of the team or all of the team to be there. Other companies, allowing team members to be working a lot more from home and or closer to home as well. So I think you'll see what we're seeing already is that a trend definitely that most companies are looking at contracting their long-term commitment. So larger companies are looking at how can they contract down and have less long-term committed space and CBD and how can they build on some kind of flex valve at a CBD location and also identify hops near people's homes where, you know, it doesn't work for everybody to work from home all the time.

Soren Tramperde...: And we, you know, that's, that's where those hop locations near people's home are going to be important for a lot of companies. I think you, you, you really have this combination of CBD locations, fringe locations, and then people working from home and depending on, on combination, I think it will be a combination of all of those three. You know, the certain companies will have a very strong culture and leadership style where they're saying you all gotta be in office in the office and we want to see you, you know, in here. And then there's the other end of the scale where everybody will be allowed to work from home you know, five days a week if they want to. So it's an interesting hybrid, and I think you'll see everything from one end of the scale to the other end of the scale, but it's, it's shifting a change that was already underway. I think it always just accelerating a change that was already on there,

Chris Bates: So that, that old school sort of mentality. And I say that because a Lot of them are those, you know, run by those, say the baby boom generation or in the management, et cetera. And you know, we can't see you not working was very prolific, I believe in that in the corporate world. Do you think they're going to be able to still attract talents without offering flexibility? Like, do you think that now that the market's moved, everyone's just got to have to offer, you know, work from home as an option at least part of the time, whereas they couldn't just say you have to be in five days anymore.

Soren Tramperde...: I think you're going to have to yeah. You know, it's, it's, it's, it's, it's, it's an expectation I think going forward too, but there are other nuances to it as well that, you know, say you're working in a company where that is, it is possible and you can do it. But if you work from home, most of the time, you may not be as visible as if you're working in the office and you may be looked over for opportunities within that company because you're just not visible. And I think so there are nuances there and there are, you know, it's just not one or the other. And, and I think that's going to drive behavior as well, you know, regardless of what people want, you know, if, if you are ambitious and you want to move up the ranks, you know, you may be much more visible. And, and that means being in the locations where the executive teams are or decision-makers are so that you are visible,

Chris Bates: Especially the latter, right? If you're at 23 or 24, and you're just coming into, you know, being at work from home, people won't even know who you are. No one knows, knows you are anyway, cause you're just starting out. So, you know, you actually want to be there. You want to be able to start to get to know who you are. Right. But also how would you learn?

Soren Tramperde...: And that's the funny part where there is companies that have actually, you know, some I'm, I'm, I'm quite close to some, some larger firms that have looked that I've actually come up with these fringe locations and they're finding it hard for people to actually that they don't want to work there. They actually still come in because they know that that's the only way up really to be seen. So it's, it's a, it's an interesting mix of dynamics, which is very much linked from a leadership style, you know, and this is obviously one of the more traditional roles called. But, but, but there's still a lot of those around right. For, for quite some time,

Veronica Morgan: But this will be a challenge, right? Because for starters, I mean, developing a culture when everyone's working remotely is obviously going to bring different challenges than the old way. Right. But you've got people that would be starting off in their career and they need to learn more than just the technical skills. They need to learn values. They need to learn the way we do things around here. That's that sort of stuff. So I guess that's a challenge, but also interesting you say that, You know, people, they ultimately would choose what they, what works for them better for them anyway, you know, so it's like the, the company might, and it also does sound like a challenge for employees because it's like the company's losing the ability to be able to say, to specify with these are our working arrangements, you know, so, and so there's pros and cons in that I get that it's very, old-school patriarchal way of governing a business. If you like to say top down. However, having something a lot more modular and relaxed and flexible and fluid could also be quite challenging from a business perspective, but also from an individual within that, you know, if you're not a sort of a pushy vocal sort of person, you might, you might get completely overlooked. Yes,

Soren Tramperde...: Exactly. But I think the workplaces are changing the way they you know, they, they need to act in a way, so it's remotely is a lot based on tech and that works and it will work. A lot of the time say two, three days a week, but there are elements that you cannot get across via tech. You know, the, the, the, you know, all the onset perceptions there are between people and, and, and all of those parts where we connect. I mean, you just got to think of you being in a meeting where say three or four people are in a meeting room and there's two, three other people that are remote that are dialing in I'll guarantee you, that you feel more connected to the people in the room compared to those on, on, on screen. And so I think the role of workplaces will need to change, and it's not necessarily for focused work is, is where you actually come in and you there's a strong cultural aspect of it. There is a strong collaboration aspect of it where you do connect and you do, you know, go in and in some ways it's the antidote to tech, you know, where it is not about tech. It's really about the human connection.

Chris Bates: Hmm. Yeah. Well, that's him. So I've got a client who's in tech, but in tech sales and we're having a chat about this. And while I was only anecdotal, I'd be interested to see if you've got any more further research, actually, something a bit more concrete. But he was saying that I've seen that the Sao conversion has dropped quite significantly when they went remote everything else is the same. They should be converting, you know, similar sort of percentages, but because it wasn't that sort of, face-to-face, let's talk it through, you know, building that trust and that likeability cause you want to work with people, you like they, they, they weren't converting as much. And so that was just an interesting thing that ultimately the sales teams in that scenario, going back to the face-to-face as quick as they can, even though they arguably could do that job virtually.

Soren Tramperde...: Absolutely. I, you know, I I'm, I'm convinced about that. I'm convinced about that human element and that connection that you do, you don't get it in the same way via tech. So I think what, what we are trying to build in work club in some ways is almost like that antidote to, to the tech where you do come in and, and it's an ability to actually connect in a non-tech way if you like, you know, in a, in a just person, to person, people, to people kind of environment it's not one or the other, I think it's a combination of both. And you've got to have a bit of a balance because if you work from home all the time by a tech, that's, that's going to create a lot of challenges, I think mentally and, you know, over time. But, you know, that's why I think there is it's not a solution for, you know, the same one for everyone. It's a combination. And I think going forward, the great thing, if you can say that about COVID is that there is an understanding now that it is possible to have a combination. So I think with X accelerated that, and there'll be a much greater acceptance of people working two or three days from home yeah.

Veronica Morgan: In the work clubs sort of scenario and, and all these sort of work, these coworking arrangements. And so I've been on your website and looked at some of the initiatives and it does sound like a very vibrant, interesting, you know, really dynamic ID sharing. You know, it's a sort of collaboration of people in different companies, different industries, even to sort of cross pollinate ideas. And that's really something that an individual organization often can't offer unless say multi departmental and they don't have all these silos, you know? So that's really quite vibrant and interesting, and I can understand the draw card of that for people who are in smaller businesses, but do you see that, you know, sort of forgetting COVID for a minute and, and the way in which we're, whether we're working from home or working from offices or, or how we're working, do you see a future where though to some degree there will be a decentralization, even in larger organizations in the way in which they accommodate people and how people work?

Soren Tramperde...: Yes. Veronica is the short version. I think, let, let me sort of answer you in a runaway way where we've seven years ago, when we opened up our first clubhouse, the focus was on the community within, and also creating a diverse environment, you know, in the sense of having many different kinds of industries and disciplines represented in that space. And then we started thinking about what we would need to overlay that with, you know, from look and feel and smell and what kind of experiences we create in order to get people connected in a meaningful way, almost invisible way over the last, last 18 months, we have extended that. And so what if we apply the same principles to an entire building? So for example, we're opening in, in Melbourne, actually we have last week just open a large site, it's called older fleet street and it's a 70,000 square meter site.

Soren Tramperde...: So it's, it's all big tower. And we've, we are essentially managing that entire human ecosystem of that tower within our space, which is about 4,000 square meters. There's about 500 members, but we don't want to just look at our space. We want to look at the entire ecosystem of everyone in that building, which is about a thousand people. So we were moving into becoming this smarts of buildings, if you like from a human perspective. And our objective is to connect people across all of the floors and companies in a better way, in a more meaningful way to create a destination. That's not just about work, but it's a place that new, you know, you feel you're part of a community and you are connected from a human perspective as well. And I think this is, this is what corporates need to start thinking about, you know, how do they offer that to their employees?

Soren Tramperde...: And this is what landlords need to start thinking about from a landlord perspective, how do they offer something which is more than just space because you need a reason for people to come in more so now than before. And, and specifically to, to your point where Ronica I mean, we have another conversations with bigger corporates that like I started out saying that they are reducing the footprint in CBD locations and they're reinvesting some of our savings back into friends' locations in their, in, you know, call it. If it's Sydney is North Sydney is West itself where they allow team members to work from those locations instead of commuting all the way. And it saves them from a CBD perspective because that's the most expensive way. And it allows people, you know, not to travel an hour each way in many cases. So there's lots of benefits from it from an employee perspective and from a company perspective too,

Veronica Morgan: But you have to be a, you have to be large enough to be able to do that and have a large enough workforce. But B you would imagine then that there'd be sort of hubs developed where similar businesses would, would congregate in a similar area, that'd be, make it more cost effective, right?

Soren Tramperde...: Yes. So I think it's not, I mean, most cases companies are not setting up their own locations remotely. I think they will, you know, it will be on demand, shared spaces, coworking spaces, pro working, you know, whatever you call it, but it will be, you know, appropriate to the brand and, and delivering the same kind of quality that they would expect their employees to have, you know, in their own locations. So I think that's interesting for fringe locations and is interesting for, I guess, property prices as well, because you know, what we are seeing from a commercial perspective is the demand fringe locations on commercial real estate. I've just gone through the roof and, you know, CBD is just the vacancy rates are skyrocketing. So it's, it's a shift.

Chris Bates: Hmm. I mean, you could argue though that a lot of the spaces that you know, that have traditionally been built, whether it's offices or coworking spaces have been quite boring and, you know, white walls and desks, how do you think that's, you know, obviously you're on a completely different level and anyone who's been to work club knows that in terms of the design and what's trying to inspire, but do you think that, you know, offers are going to have to take it next level in terms of the whole experience that what you experienced when you go to work, like going to a cool cafe or a cool restaurant, do you think that the key companies out there that are looking to attract talent, having to go next level in terms of what they offer day-to-day to their staff?

Soren Tramperde...: Yes. And again, this is where COVID has accelerated this trend that was already on the way, you know, if I go back to landlords, they, you know, 12 months ago they were talking a bit about how do we create experiences and how, you know, it's more, almost like a hospitality experience that could be created. And now there's just this mad scramble to actually accelerate that because, you know, how else are you going to get people into buildings? You know, in, in, in, in, in the city, you can't, it's going to be much more offered to do that. So and, and in remote locations as well, if you're just providing the space, that's not enough. I think it is about that connection. It is about being part of a community. You know, whether it's your, you know, just your colleagues, but also you know, people from different industries and different companies in the same space. So I think that the, those landlords are those shared spaces that will offer real communities of which I don't see that many. I think we'll do really well.

Chris Bates: So I joined a, I've been part of work club for, I don't know, four or five years, but I was in between sort of you know, cycles, I guess, on the membership. And I thought, Oh, I want to try this new company was setting up a big name, but probably most people coworking would know. And when I experienced the community, that, and that what you were kind of alluding to before Veronica around big corporates, this sort of co-working space, or this quite a company target a lot of big corporates, because there's a lot, we can do it cheaper and more cost efficient for you. But the problem with those sort of co-working spaces is there was very little community because there are big corporates and there was no sort of cross-pollination of the companies where there was actually a real community. And so really all you had is what's a lots of desks and lots of offices, and everyone walking through hallways and not saying hello to each other.

Chris Bates: And if anything, it was a more of a toxic environment rather than a positive environment, because there was a bit of a, yeah, it was a bit of a fight free for all a little bit, rather than, you know, a vibrant sort of happy community. So it's a really hard thing to create a community that there's a real positive energy behind it. And do you think that's going to be the biggest transition for companies to move to this model, but then just do it badly, I guess, is that where you're thinking is going to happen? Sorry,

Soren Tramperde...: This is for me where it's actually really exciting what's happening. You know, if that sounds a bit bad because it has been a horrible year for most people, but I think what's exciting about it is that I think there is a acknowledgement or starting to be much more understanding around, well, how do we actually create something where people are connected? And I guess this is my passion. This is where I'm interested in, in that human aspect of how do we connect people? You know, the space is pretty easy to do. Everybody can do as a design, it'll make it look good, smell nice and everything. That's not the difficult part. The difficulty is how do you almost in an invisible way and not forceful away connect people sort of, they, it feels different. They are connected in a different way. It's not just work. It's, it's a place where, you know, it's almost like a, you know, a safe house or it's, it's a home it's, it's where you feel you actually, you belong.

Soren Tramperde...: And you know, that there's, there's safety around that too, you know, and, and being around like-minded people that actually, you know, are there to support first and to give first, I think when, when you create that, it's not like you are, you know, saving babies, but you do have a big impact when you, when there's a support network for people from a professional perspective, but also personal perspective. And I think when, when that flows through, it's quite exciting because I think that there is an increased need for that, you know, this world that we're in right now where this, the change is just accelerating and, you know, the speed of change is faster and faster every day. The uncertainty is exciting for some, but for most it's creating anxiety, you know, and a lot of nervousness and, you know, how do you ha how, how do you address that? Think you, one way of doing that is that you are part of a community where there's support and you can you know, you feel that it's almost, you know, that support network around you and it you know, I think that will be increasingly important in, in the world that we live in because all the tech platforms, all the community platforms virtually, they're not delivering that. Yeah.

Chris Bates: We're living in a social media world as well. Right. So there's this. So, you know, we're not even talking to our friends, we're just texts. We don't, you know, we're just looking at pictures of them doing things. And then we work from home and then we everything's done via email. No one picks up the phone. So, you know, communication level that we actually would, you know, it must be dropping every, every year. And ultimately, you know, humans are quite tribe creatures, right? So we have done that for millions of years or whatever, whatever it is. Right. So it's a massive shift to our evolution that doesn't really go align without what, how we've evolved, I guess. And so there's going to be consequences and mental health is obviously one of the big parts of it, which I can notice already. I mean, I'll be working from home like everyone for the eight months. But you can still feel like, you know, there's the cabin fever or the, just the getting out and about, and the coffee or the, you know, all these sort of things, you know, you put a lot of people are realizing that that was giving them a release to just kind of realign where they're going and then off they go again, you know? So yeah,

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Veronica Morgan: I'm sort of interested in the idea that you wanting to build these communities and change the way we work. And, and obviously COVID coming along, has accelerated eat along with a lot of other things. So many people we've interviewed and said, you know, these are carbon, these things are coming, but it's, it's basically pulled a decade into six months. Now you just opened this, this whopping great site in Melbourne, you know, in Collins street. And it looks stunning. It might, you must've had your heart on your mouth for that entire time. Maybe still do, because of course, it's not just the idea that you know, now people are working from home more than they're working in the city, they're doing a hybrid model and all this sort of stuff. But, but the very fact is at the moment, we've got this issue about moving large numbers of people in and out of buildings.

Veronica Morgan: And there's, there's all these other things that no one ever thought about how many people can get in the lift, you know, and how long does it take to fill a building and then empty a building and, and, and all that sort of stuff. So, Oh, you must have, you know, I, I would have very much imagined you've been having all these sorts of conversations, given the fact you've just got yourself 4,000 square meters of more space in the city, in a city that's just come out of, out of a massive lockdown as well. How do you see that continuing? I mean, do you see the scent decentralization is really going to become permanent in our society? Do you see that the CBD has to change, but there's going to be complete change of use of these buildings? I mean, what are you sort of envisaging there?

Soren Tramperde...: Good question. I'm not sure I know the answer. I, I think what we have seen over the years is that there's a move to create more, you know, different kinds of asset classes in in CBD. So not just commercial buildings, but also residential and Melbourne have done a great job in doing that. Probably one of the biggest drops. So, and, and Sydney is going in that direction as well, where there's much more residential coming into the city, which would mean that you have there's, there's much more life, you know, if you have a CPU with just office buildings and it's a nine to five it's, it's so underutilized, and it's a waste of space that, you know, I've been saying that for 20 years, you know, it's about creating buildings where there's this blurring lines between, you know, live, work, play everything in one location, because that's where you're driving efficiencies.

Soren Tramperde...: If you like, for lack of a better word, you know, in terms of how do you use those buildings? And you know, buildings has got one of the biggest footprint from a carbon perspective. So it's really about how do you utilize them better and not just, you know, one third of the day or 40% of the day. So I think there's a lot, there's a lot going on in that space, which is really interesting. And, and this is actually accelerated with COVID. I think you will, you'll see CBDs becoming much more varied. You know, you'll have all these different kinds of buildings, ACIC buildings, the same way, remote fringe locations as well. You know, like we are going into fringe locations ourselves, you know, it's we, we are actively and have been for a while. Also, you know, we will be opening locations in, in fringe locations.

Soren Tramperde...: And, and to me, I always saw that not whatsoever. I mean, I I've, I've said that for years, that I think that's natural and even regional, you know, there's real need in, in regional Australia also to, to have clubhouses if you like, for lack of better word and any wins locations, because it just makes sense. And it always made it made sense in the sense that, you know, we're all driving in cars or public transport into the CBD at the same time in the morning and leaving at the same time in the evening, that doesn't make sense from an efficiency perspective, but we kind of, that's just what you do, right. But that's not the best way. Melbourne has been painful and 4,000 square meters sitting empty for three, four months, doing a lockdown has not been the most exciting part of this year.

Soren Tramperde...: I can tell you that with three F and B venues as well, that we're sort of entering into it's just, it's just very exciting that things are, are slowly opening up and you can, you know, just from a team perspective, the whole team was working from home for all those weeks. And just the mental state of them was just deteriorating, you know, week by week. And, you know, it got to a point the last few weeks where there was just tears and it was just really just about connecting with them on a daily level to make sure that they were actually okay. So it was getting to, I mean, it's just, it's hard to imagine.

Chris Bates: I mean, the big problem at the moment is you can't do, even if people are working from home, one of the ways to combat that culture, mental health connection, et cetera, will be to have sort of events or like you know, days out as a team where you go and do something, can, you know, more regular activities as a group to bring people together, which I think a lot of the tech companies already have been doing, but, you know, with COVID you couldn't even do that. Right. So you had people working from home and no way or no way to bring the team together for an event or something. So I think that mental, the mental health is probably been a bit even further, you know, difficult. I'd like to go on a different time. We've had an app, we've done an episode on car leading and I've tracked.

Chris Bates: So the car living pretty closely, like whenever I hear of a company that's out there, I go and do some research on them and we had UNO on here or her car, I think it is. And yeah. So what's your thoughts on cause COVID and co living kind of contradict each other a little bit, right? It's there's, COVID a lot, well, you know, you know, self isolates and social distance, et cetera, but kind of living is the opposite, you know, we're all living connected. So it's funny. Did you think it's actually out on the other side of this, assuming there's a vaccine or assuming that we go back to some sort of not social distancing, do you think that it will continue on the path it was on? Or do you think it's been a bit of a, the opposite it's actually delayed that movement?

Soren Tramperde...: Not the second part. I mean, I'm from Denmark originally, so called living to me, it's like makes total sense in that regard because it's, I think it's pretty normal to some extent in Denmark and always was. So I think that may have been a little bit of a pause, but I think it will just accelerate again. And it's, it's a little bit similar to build, to rent where, you know, there's a lot of, of, of that on the way in Australia. And I think that the interesting part of that is that again, how do you create a built to rent tower where it's not just individual units, but where there is a community that you're building that and a hundred percent, you know, maybe the best ways not to build an home office in your little box, but to have its place in the building where you can go and you can work from, and you can meet and connect with our building. So I think, you know, the, the developers and landlords that really get that right gonna create really strong communities, interesting buildings that, you know, you would want to be there versus a building next door. We're just boxes. And that's it.

Veronica Morgan: And this is, this is a challenge. We interviewed Lucinda Hartley for neighbor Lytics you know, basically research, you know, data house, basically looking at social, social data and looking at how suburbs, you know, generate different brands or different fields if you like. And it's interesting because I've always wondered it's chicken and the egg is, you know, there's some buildings and complexes and suburbs on the surface of, it seemed to be really well-designed, but for whatever reason, just doesn't get off the ground in the way that you could see it was in busy. And other times we think somehow organically or smoke bias most is somehow community is, has developed its own a chord, you know, and it's, it's so doing this by design is really problematic. Because humans have this sort of strange, like you're talking about before, you know, people deciding they gotta go into the office, even though they've got satellite or satellite offices that can go to closer to home for their own reasons. So it's sort of weird, isn't it? How humans will somehow work a way that suits us. I'll say them as if I'm not one, but, you know, versus actually trying to actually make it happen. And it's a challenge, isn't it? Because I guess investors are going to be thinking, well, there's gotta be some sort of return, otherwise, why do I do this? But it's hard to quantify this, I would imagine.

Soren Tramperde...: Yeah. But I do think it's possible because I think there are a lot of developments where it's been almost entirely hardware focused. You know, this is the units, this is the commercial side behind that. And, you know, it's, it's, it's driven in that direction. And then sometimes community happens just by chance and it's a thing, more locked planning. And sometimes, but I think if you, if you do hardware and software hand-in-hand and you really consider it from a hardware, you know, what do you need to do from a hardware perspective to, to actually, you know, create higher profitability for people that can connect, you know, and, and the right kind of environments. And, and if you do that, hand-in-hand with that software approach, I think you, you do have a much greater chance of creating environments that are much more interesting. And I think that's my interest as well.

Soren Tramperde...: You know, I'd love to try and apply the principles that we're thinking about on an entire precinct, which we've done in Canberra where it's, it's a couple of office towers, there's a couple of residential towers and it's a five-star hotel and shopping center. And we've looked at all of that hardware and tried to overlay our principles of how we connect people through physical place-making and, or a set of experiences that we think will create a better connected precinct. We will, we'll be executing that, or we'll be, we'll be opening that up in, in a couple of years, but that's on a much bigger scale. And I think if you, if you're conscious about it, at least the probability of creating something will be higher.

Chris Bates: I mean, Google are doing that a lot. You know, I think in Silicon Valley is they're like, well, you know, we want to more people, we want them to enjoy coming to work and live close by. So why don't we just build a whole community? Let's, let's build everything shops, you know, offices I have it all into all it's interconnected and you're talking, you know, and I don't know, you'd probably learn a lot about it siren, but I, I, you know, that's what their approach is. I mean, here locally, we've started out at first on for Mirvac. You know, they're trying out a few different build to rent sort of buildings. They're way more invested in the success of that building, obviously than if they're just doing another development, not to say they are in others, but but it's going to be a work in progress, right?

Chris Bates: They're going to do the first one. I go, what really worked here. Like, you know, when we had that app, that was amazing for people, people really used it, or they might say that was a waste of time, no one actually ever engaged with it. So it's going to be this sort of a process where, you know, you're going to get more and more investment and build to rent in a coat, better communities. And the big, interesting thing for property investors, I think with this conversation is if you've got a standard apartment in a boring building that offers no community, that's only built, that's not in a great location, and you've got this next evolution of buildings coming, which is definitely coming. How do you sell your apartment when you've got these apartments that are going to come out in 10, 20 years time that are going to be way better than yours and offer way much more to the people who live in those apartments.

Chris Bates: And so I think even though there was already a lot of files for those apartments, there's a huge one sort of coming to a lot of people just aren't even switching onto. Yeah, I totally agree. Obviously, there's new developments. There's lots happening around Sydney. Sydney was in a construction boom, but definitely on a commercial side, not so much, it was on the tail end of the residential, but you know, you only have to go around the CBD. You can say, you know, Q quarter key quarter, you've got a heaps of buildings, right. They, you know, they come to people like you and said, look, we still haven't kitted it out. It's in the process, we're doing the call. We're still building the levels. We had this sort of design on how we thought each level was going to look, but now we need to shift it and we need to change the way that we do everything right. Where we put the toilets and all that sort of stuff. So have they come to you and are they really sort of shifting, you know, completely in a different direction to what they were thinking before?

Soren Tramperde...: And some are, I think what, what we're doing with landlords is that if, if they have a really interesting hardware project, you know, if you like, you know, a precinct, we, we will engage with them and we'll work with them. Career consultant engagement pretty much where we actually spent time. We look at all the hardware we think about, you know, how can we apply some of our principles to that. And then basically come up with all version of, of how we would do that together, the landlord. So it's hand-in-hand, and then at the end of it, we'll agree whether this, this stacks up from both of us from a commercial perspective and we may or may not execute on it. That's the one end. And that's the exciting part. And we're having a lot of conversations on that front. The other end is, you know, landlords that are just coming and saying, we've got two floors. Do you want to take those two? And that's that I think is no longer conversations that are of any value really, because that's, that's, that's just trying to get rid of space and without really thinking about how is all this going to work together? How is the ground floor are going to work? What do we need to do to do ground floor, to activate it and create more than just a big empty space. So it's interesting. Some landlords are still in that old world and others are definitely not. So

Chris Bates: Because like any building, some landlords just don't care about the I mean, they want to just make sure it's filled, but they don't want to, to renovate a commercial tower, change the air-con, et cetera, et cetera. It's a lot of money and a lot of landlords a lot. Well, I know I'll get a yield that way, but I'm just happy for her just to sit there in the capital value to potentially go up someone else,

Soren Tramperde...: Crispy Cousteau power shifting. So the power has been with a landlord for many years, from a commercial perspective, and there have been absolutely in a strong position to you know, not to make really any changes. I think that power is shifting across the field to more the operational part of though, you know, how do you, how do you create experiences and hospitality experience in service in those assets? So there are companies that are specializing in those and, you know, the pendulum is almost swung a bit more to what stores I think because hardware is, yeah, it's, it's, it's just moved from landlord to that more obviously there's still power the landlord, but it's definitely moved towards operators that understand how to create an activate and build communities within buildings,

Veronica Morgan: Sort of bring it to life. But also, I would imagine that you mentioned earlier that the price for commercial space in the ring suburbs is going up and the price, you know, square dollar per square meter or whatever in the CBDs is going down. So they're now facing competition from areas that I would imagine they'd never had to face competition from before, and that takes a mind shift change for them to be able to, to get themselves out of, but I've got this building and it's a blue cheaper, and I grab a building or whatever to, to realizing that the whole market has changed. Some will go with it and some won't, you know, and so that's how you get white elephants.

Soren Tramperde...: Yes, that's exactly right. It's funny, you know, that we are having conversation. I mean, we are hopefully, well, our plan is that we are going to grow. And, and you know, there's a lot of sites in the pipeline, but it's interesting. And there's a lot of conversations with landlords and landlords. You know, there are some landlords that are still thinking, you know, 12 month back, but the market has moved 20, 30%. So, you know, I guess that's the same with everything

Veronica Morgan: It's, as you say, it's the same with everything. It's the same. If you're trying to sell a car on eBay, it's, it's, it's, you know, trying to sell a residential property, it's trying to lease your commercial space. You know, there's some people that just fix their sites on the past rather than the present and the future

Soren Tramperde...: Demand and supply. Right. So it's just, it's just, and, and having you finger on the polls, you know, is it going to go down or up, you know, and if it's going down, you're, you're better off doing a deal now.

Veronica Morgan: Hmm. So one of the evolutions, I think that you did a few years ago is can we include included a bar right. Which I thought was quite strange at the, I thought, well, all of a sudden

Chris Bates: This is turning to more of a bar rather than a workspace. You know, as it now, more like a gentlemen sorta club, or is it more like you know, and it was kind of like, it was an interesting shift to, to watch from a member point of view and, you know, and that's tomato, but now it makes perfect sense. Right. You know, not just the bar, the coffee, et cetera, what show, you know, cause I've seen this pro working sorta not many probably listeners have ever heard of pro working. So what is this sort of evolution of co-working like, what direction and how is that going to play into the future of work? I guess?

Soren Tramperde...: So think Paul working is, it's just an expression that we use. And you know, as shared space as a sector is just getting a bit more sophisticated and it's growing, you know, seven years ago people were asking me, you know, why are you costing grease? And these guys are costing that, well, you know, this is KFC and this is, you know, there was no understanding of scotch in terms of you know, the general investment, but now there's a much better understanding of this is two star three star, four star five star. So can we just define pro working? Cause like yeah,

Veronica Morgan: Many of the listeners will have no idea what you're talking about.

Soren Tramperde...: It's kind of a subset of coworking to the, you know, sub category where it's, it's about curation. So it's curation of members, you know, it's called region of the space. It's really, it's it's a curation of knowledge as well, where there's a, there's a focus on not just work, there's a focus on learning as well. It's curation of membership. Curation is really one of the key words and it's not exclusive, it's not elitist, it's just at a certain level. Right? The idea. And the idea is, is that you create that diversity in industries and disciplines. And that's, that's the curation element that you know, it's not just 20 graphic designers that are in there. It's a real diversity,

Chris Bates: That's interesting point. He says that not exclusive because there is a coworking spaces that, you know, that's their value proposition. Like you've got to yeah, it's kind of all behind the doors. You know, everyone knows each other. Everyone's kind of hidden and everything's kind of spoken about in there is kept in there sort of thing. And there is a top of that sort of coworking space. But the problem is that you do exclude people that, you know, don't want to be in that sort of environment that are more open to lots of different people at lots of different stages of business or different stages of life. And so do you think that you will start to see like lots of different sort of target markets with coworking spaces rather than, you know, the old sort of religious or white walls sort of thing, just an involvement of the

Soren Tramperde...: Industry. And I was like, yeah. And like I said before, it's not, I don't think it's not about something that's better or worse. It's just, it's, it's relevant for, you know, some people are not for others, so it's like, you know, not everybody can stay in a five-star or not. Everybody wants to stay in a three-star, you know, so it's all it's just is, you know, and, and it'll be right for some and not right for others. On the F and B side on the bar side, Chris, you were mentioning there, you know, with all the feed there's three venues. And, and the whole idea is that with owner fleet, there is there's a bar for members only, there's a bar for members and tenants, and then there's a public bar as well. And the idea is we really want to reach out to everyone in that you know, a context that we, you know, our bartenders are not just bartenders, they are facilitators and connectors and there's ecosystem, you know, how are we going to get to know you, Chris, and link you into these experiences that we have in the community or to Veronica, which you need to meet?

Soren Tramperde...: You know, so that's, that's why we're doing it. It's not as such because we want to be beacon F and B and it's, but it is an important part who cover not just work, but social and really everything that sits on the life. That's really what it's about. I think for us,

Veronica Morgan: One of the I guess the surprising things that happened, I mean, everyone, even before COVID was saying, you know, like the coworkings co living, it's all on the rise, this is the future, et cetera, et cetera. And then we work had a pretty, you know, diabolical circumstance financially for them. Right. So what happened there and why, you know, there'd be the poster child, right. This whole coal industry and what happened and why did it happen?

Soren Tramperde...: I think that's an interesting one. I'm not sure. I think one of the things for sure is that they went for spice, right. And it was about price and they were supported by one company that essentially drove that value, you know, artificially, you could probably say, because it really was just one main investor that was behind that it wasn't a collection of investors, it was reading. And so that valuation was never really, that really stick. And I think you, you know, it's in some initially a thought isn't stop box of the industry, which is not good. It's not bad, it's just mass market. But I think it got to a point where it's, it's mass market and it Starbucks for just with really, really poor quality. And I think it just went too fast. Yeah.

Chris Bates: The danger was, it was becoming like a plaintiff's right. It was becoming like a w after PI is, you know, benefiting from is when you become the word of the industry that you are. And I think we work, we're getting that because that was spending so much money in terms of just everyone was talking about and their valuation was getting lots of media attention. And not like Airbnb is now the name for, you know, if you're going away for the weekend, you know, you don't say we're going to stay, it stays or it's, I'm going to get an Airbnb for the weekend. And so I think that was for me on an outside, I was thinking, this is not the poster child that I think co-living co-working should be, it's not, you know, for me. Good enough. And so I think that was the problem I was saying is that the industry was getting affected by this sort of Goliath, just pushing member numbers and pushing you know, the valuation up for private investment fund, I guess. So, but do you think, how did he, that's going apply out from here though, because they're still got all this Oz, there's still go, you know, half a million members, or I don't know how many members they've got now, but how do you think that they're going to have to pivot to become, I guess, profitable and an actual business that survives

Soren Tramperde...: That's an interesting journey. I think, first of all, as a company, big or small, you've got to deliver on your promises. Right. And I think that those promises were not delivered on, you know, because that's, that's a major part first where they're heading right now. I know there's there's a lot of committed sites that we're not taking on. So I know there's definitely a contract. But it's also interesting. There's a move into a market where they are competing directly with landlords to some extent, and they're offering their entire sites to one company, for example. So it's a, you know, it's 500 people plus kind of culprits, there are engaged with to basically service their entire needs. So it's no longer just a one or five or 10. It's really that they're, they're moving up into a different area, which is again, not good or bad is it's just interesting to observe, but I think it's, they've gone so fast. I think they've delivered on some of their promises and I think there's some adjustment in place to, to get to that place. But I think there's no doubt that there is a market. There is a market in that segment. I guess it's just figuring out exactly what is the the, you know, the value procession in that segment and deliver on it, you know? Yeah. there are some financial challenges they need to overcome in the next few years to, to get through that, for sure. Well, I imagine it's quite

Veronica Morgan: Capital intensive, what they're trying to do, even though they may not be buying the spaces themselves, they've got to fit them out and they've got to hold them, you know, while they're trying to get a big client to sublease them or whatever their, their plans are. And obviously rapid expansion is risky, isn't it? You know, you got to start getting your cash flows up pretty quickly and all your investor funds very quickly in order to sustain it. Yeah.

Soren Tramperde...: Yeah. That's, that was the big thing. I mean, there were losing a billion at some point,

Veronica Morgan: Oh, Jesus. It's just hiking. So if you've got it on that note, though, if you've got a bit of a, have you got a property done by forest?

Soren Tramperde...: Oh, I don't know. You know, it's not really residential. I think it's probably more commercial. It's interesting. I mean, we've been dealing with a number of landlords during COVID and one of the things that we did was we offered members to port their memberships during the height of the pandemic. And it's just been interesting to see certain landlords have been really reasonable and unaccommodating and, you know, looking at it, long-term, let's get through this together and work through this and other landlords and one in particular when the other direction and say, no, you're going to pay us in full. And, you know, if you don't, we're going to come after you. And it's just interesting to see, you know, why would anyone do that? You know, because it's just such a short term view. And I mean, all of you coming out of that is that we are out of that lease actually already. So it's, it's such a loss from, from their side, which wasn't based on any commercial or logical sense, but probably a more of an equal

Chris Bates: Short-Term business mindset is not going to create a long term you know, whatever. Right. So, you know, if you partnered, I imagine that's probably a smaller landlord rather than a big player, because a big player probably doesn't want to burn you because they know that you could be one of their best customers or their best partnerships, I guess, more than a customer. And yeah, that, that, that mindset it's hard to know in, in, in that sort of COVID experience. I think everyone sort of had their cop, everything on the chin, right. Everyone, no matter what way you looked at it, everyone was taking a hit some way. And to not sort of play ball, it's just sounds like you're just burning your, but your customers really at that point in time. And like what you did, you know, exactly giving a pause for people for those few months. Some would've needed it. Some probably were desperate for it. Some probably didn't need it, but just to give everyone that option was allows people just to build trust with the, you know, the, the workplace that they're part of it. It does make me laugh though, because we've seen, you know, on the residential side, individual landlords doing the same thing, you know, it's like, of course there's been legislation protect tenants,

Veronica Morgan: But there's also been this attitude from some not a lot, but some that it's all very much around, you know, not, I'm not dropping my rent, not, you know, you can, you can go as soon as your lease ends, not, this is his belligerence. And it's like, okay, that's all good now, where are you going to find another tenant? And if you do find another tenant, they won't be paying the same rent you were getting anyway. And you're going to be sitting there with vacancy and, and advertising costs and relating costs and all that sort of stuff. And you just think, have you not sat down and worked this out, but it's just this very, very narrow, narrow focus. And as you say, short-term thinking it's phenomenal. And I always wonder how the hell they get their money in the first place.

Soren Tramperde...: Yeah. I mean, we had the same experience where they just refuse to code, know the code, you know, it's just it just, it just, you know, it's like saying no, that wall is not white. It's black. Just interesting. You can argue with, with things like that.

Veronica Morgan: You have to give off if logic wasn't used to form an opinion, you can't use logic to disabuse them of that opinion.

Soren Tramperde...: Funny, actually, it's just, it's just yeah, it's almost comical.

Chris Bates: Yeah. Kind of, sort of presence that I'll fallen for way too many times. But anyway, I really appreciate the chat. I think it's really is a really interesting space. I think if we were going to forecast population growth how cities were going to evolve over the next 20 or 30 years at the start of 2020 we probably would have said there would have been a rise in work from home, you know, more satellite, et cetera, but our prices of property potentially would be over that 20, 30 years. Maybe it would still be in the old onion, you know, a lot of the properties around the city that would be more expensive, but it has changed. And it has changed, you know, up and down the coast and regional areas. And I've got much better prospects than they probably did. So a big part of that is work, you know, how does work change? And so really appreciate the chat.

Soren Tramperde...: Thank you. Thank you both as well. Our

Veronica Morgan: Pleasure. We want to make you a better elephant rider. And this week's elephant rider training is intrigued a bit by this idea of, you know, the future work and the decentralization of our, our cities and the, even the, the immediate impact that Soren had talked about in terms of the price of commercial real estate or office space in the sort of outer areas of cities rather than inner areas. And it'd be interesting to see, you know, long-term, if this does play out this way, we've also seen the way people are embracing the idea that you can commute a bit longer if you're only going to do it a couple of days a week. And so there, you know, the regional areas within a two hour commute of some of our cities are seeing some real increase in buyer activity and price. But I guess what I wanted to talk about here is to be careful about thinking, well, that means that the onion, as we talk about, you know, the onion being the smaller areas or close in the middle of the city, and as you go out, the onion rings get bigger and bigger and there's more and more property.

Veronica Morgan: We're going to be careful when we look at the onion rings to say, Oh, well that means that all these outer areas that we have an outer suburbs, and there are cities that are going to take off because people will be able to work in satellite locations, et cetera, et cetera. And I think that we just need to sort of have a quick discussion around the demographics and the things to look for. If you are going to be banking on a decentralization of workforce and how that might play out to residential property prices. And the very first thing that I think we should have a quick chat about is thinking about where the high incomes and what do you need to do to earn a high income, and where are those people going to be likely to live? Because that's really where it's going to have the greatest impact. Would you agree?

Chris Bates: Yeah. I mean, it's, I think the whole hub model unless the co-working, Cisco's so many different elements to it and yeah, there's a coworking space near where I am in the beaches. There's a couple, and it's not that enticing. They just don't the look and feel of them and where they're like hide it and the lights and the building. It's just that I don't really want, I probably just work from home rather than go to that space. So unless you really had a hot work from home environment, that was, I might even, if you use time, when Ellie's a little bit big, I might be, I'll be desperate to get out of the house. And that's an interesting thing. We worked from home with the old ones, but yeah, I think the, you know, it has to be a pretty high quality product, I think, to be better than home.

Chris Bates: And I don't think that's going to happen, but not if, if you find that th that won't go everywhere, there'll be, you know, the funding we spoke about the we work challenges. So they'll only go to certain areas and that line is serve as a little small community around that. So to expect that there's going to be this coworking sorta spoken hub model that is getting banded around or the fried egg or whatever it's called. Yeah, I don't think it's going to happen. I would not. And I think if you come back at 2030, it's still be struggling to, to really gain traction on that everywhere across the capital cities.

Veronica Morgan: And if you go back to episode 145 a, which we recorded with listened to Hartley for neighbor Lytics, that you know, she was talking about this sort of research that they do into sort of house and land package areas and new suburbs that are created on the outskirts of our cities. And I think what sort of was interesting in that discussion was the organic nature of how the flavor, if you like of these communities developed over time. So, you know, I just think that this bootcamp really, it's just a little bit of a warning, a little bit of flag to say that these things are there, even though COVID has accelerated things, these changes are really structural in terms of the way our CDs operate. They will take a long time to really turn into anything meaningful in terms property prices.

Chris Bates: And there's an enormous element of chance and sort of organic nature of how these things happen. So it's just to be warned about looking outside the cities and the proven long-term growth areas that you are taking risks, and it might work, it might pay off, but it's going to be in the long-term. And it also may not be a hundred percent agreement at the moment you get, we're getting a completely shift in buyers, what they're looking at the moment. So what's in the central coast, North of Wollongong, et cetera, but, you know, there's a Sydney people that work in the city that are NASA. I'm happy to do the Kimmy because I'm confident that I can do work from home, or we're actually looking for a lifestyle change. And we can get a lot more for our money up there, et cetera, but that doesn't mean that whole suburb or the whole area per se, is going to go up in value.

Chris Bates: Because they're only looking at a small subset, they're only looking at certain areas and certain suburbs because they're like, well, if I'm going to leave Sydney, I only want to be in this handful of suburbs. And so you, the central coast could grow at X percent, but the, that will be very heavily weighted to a small fragment of the market. And even in that market will only be fragmented to a small portion of the properties in that suburb. Whereas it's not going to have a pressure cooker across a whole of central coast there isn't demand to go and buy all the properties in central coast and push them all up in price. And so investors say, Oh, well, this, this work from home movement, central coast, let's just go buy a property up there. You could very under know, find that your growth isn't great at all. Even though central coast as a percentage has done. All right. You haven't owned this off, it's gone up. And I think it's extremely risky because of that. People aren't thinking through that sort of dynamic and how it's actually where wearing the market, it's gonna go off and wait, potentially not. So, yeah, that's a good point. Yeah.