High vacancy, cautious occupiers and changing workplace demands are putting pressure on office landlords. Flexible office space offers a practical response: make buildings easier to buy into, easier to use and harder to leave.

A vacant floor does not care what rent you hoped to achieve.

The holding costs keep coming. The leasing campaign keeps running. And another month without a tenant is another month of income you cannot recover.

For landlords facing a difficult office market, flexible office space can be a lifeline. It opens a building to businesses that need a workplace today but cannot justify the size, fit-out commitment or lease duration on offer.

An empty floor is already costing money. Waiting needs a business case too.

Australian office vacancy: the pressure is real

The Property Council of Australia’s July 2026 figures put Melbourne CBD office vacancy at 18.9%, compared with 13.3% in Sydney and 10.2% in Brisbane. Melbourne had improved only marginally from 19% six months earlier. [1]

That is almost one-fifth of Melbourne CBD office space vacant.

Cath Evans, Victorian Executive Director of the Property Council, captured the challenge:

“The stabilising of office vacancy is welcome, but Melbourne still has Australia’s highest vacancy rate by a long way.” [1]

These are vacancy figures, not desk-attendance figures. They measure different things. They also show why a national recovery headline offers little comfort to an owner with an empty floor.

The commercial question is immediate: how do you make that space relevant to the businesses making decisions now?

Occupiers are telling landlords what they want

CBRE’s 2026 Australian Office Occupier Survey found 53% of respondents expected greater adoption of flexible space over the next three years. Its November summary also reported average weekly office utilisation of 54%, rising to 69% on peak days. These are survey findings, not a census of Australian businesses. [2][3]

The implication is straightforward. Organisations need places to collaborate, meet clients and get work done. They also want control over how much space they commit to and how quickly they can change it.

As Genna McCarthy, CBRE’s Regional Director and Head of Office Tenant Representation, Pacific, put it:

“That makes flexibility increasingly important.” [3]

For landlords, this is a product-design challenge as much as a leasing challenge.

If a business wants a furnished office for a growing team, offering it a large empty floor and a lengthy commitment may miss the brief before the conversation starts.

A leasing strategy should make it easier for customers to say yes.

How flexible office space can help landlords

Flexible offices package space, services and contract options around business needs. Depending on the offer, that can include private offices, managed suites, meeting rooms, business lounges and project space.

For owners, there are four practical opportunities.

1. Reach businesses your existing offer excludes

A smaller company may have the capacity to pay for a quality workplace but no appetite to fund a fit-out or predict its headcount years ahead.

An enterprise may need a project office, an interstate base or temporary accommodation between leases.

A flex offering can address those needs within the same building. It broadens the pool of potential customers beyond tenants ready to take a conventional floor.

2. Create a pathway from first desk to larger tenancy

A business can enter through a small office, add capacity and potentially graduate into a larger suite or direct lease.

That creates an opportunity to retain growth within the building, provided the operator and landlord agree how referrals, expansion and customer ownership work.

It is easier to build that relationship when the business is already in the building.

3. Make shared amenities work across the asset

Meeting rooms, training facilities, lounges and hosted events can serve both flex members and conventional tenants, where access and pricing are designed accordingly.

The potential benefit extends beyond the occupied flex floor: existing tenants gain useful services, while prospective tenants see a building that supports their teams.

Amenity must earn its place through use. A beautiful lounge that nobody needs is another cost centre.

4. Turn workspace into a service people value

Good operations matter every day: reliable technology, responsive support, clean facilities, straightforward bookings and a team that remembers who you are.

At Cubes.Co, our view is that hospitality and community belong at the centre of the workplace experience. People should feel supported and connected when they come to work.

The building gets people through the door. The experience gives them a reason to stay.

Flex is becoming part of the leasing conversation

JLL’s April 2026 report, The Flexible Office Space Imperative, makes a direct observation about Australia:

“Flex space is now a non-negotiable for many corporates during lease negotiations.” [4]

JLL also describes landlords incorporating flexible workspace operators to improve their building offer, while noting that results vary by location, quality and operator execution. [4]

There is encouraging operator evidence too. Flexible Workspace Australia’s Flex Futures 2026 highlights report that more than 60% of surveyed operators increased profitability in the previous year. The report includes an operator survey of 41 businesses. This is industry-body evidence about respondents, not a guarantee of landlord returns. [5]

Our interpretation: flex deserves a serious place in an asset strategy. The figures do not prove that every vacant floor should become coworking space.

The deal structure matters as much as the fit-out

A busy workspace can still be a poor investment if the economics are wrong.

Owners need to compare the net result after staffing, utilities, sales, cleaning, technology, maintenance, operator fees and capital costs. They also need to fund the period while occupancy builds.

JLL identifies a shift towards management agreements and revenue-sharing structures alongside conventional leases. [4]

Structure	Commercial approach	What the landlord must assess
Operator lease	Operator leases space and sells workspace to customers	Covenant strength, security and sustainable rent
Management agreement	Operator manages the workspace for agreed fees	Owner’s operating exposure, funding and performance controls
Revenue share	Owner and operator share defined revenue	Cost allocation, deductions, downside and transparency

Terms vary. A revenue-share agreement does not automatically mean costs or losses are shared.

Before committing, test local demand, competing offers, achievable pricing, break-even occupancy, capital requirements and the operator’s track record. Agree reporting, responsibilities and exit provisions from the outset.

A landlord and operator cannot build a durable partnership on a spreadsheet that only works when everything goes right.

The goal is a viable business inside a viable asset.

Waiting for the market is a strategy. It has a price.

A conventional lease remains the right answer for many buildings and tenants. For others, the mismatch between available space and customer requirements needs a different response.

Flexible office space can help close that gap.

It can give businesses a simpler way to enter a building, a better experience once they arrive and room to grow without starting again somewhere else.

For landlords, that is a credible route towards activating space and generating income, subject to demand and sound operating economics.

The next tenant may already be looking. The question is whether your building is offering something they can actually buy.

Explore a flexible workspace partnership with Cubes.Co

Cubes.Co brings together workspace, hospitality, events and business community through brands including CreativeCubes.Co and CorporateCubes.Co.

If you own an underused office asset in Melbourne, Sydney or Adelaide, talk to Cubes.Co about assessing its potential for flexible workspace.

Let’s put the space to work.