Traditional offices were designed around a simple assumption: most employees would attend the same workplace, at roughly the same time, five days a week.

That assumption no longer reflects how many Australian businesses operate.

Hybrid schedules, distributed teams, project-based hiring and changing employee expectations have made workplace demand far less predictable. In August 2025, 36% of employed Australians usually worked from home, according to the Australian Bureau of Statistics.

The office remains important. Its role has simply changed.

For mid-market organisations, the challenge is no longer just finding enough desks. It is creating the right mix of space, service and flexibility without carrying excessive cost or committing the business to capacity it may not consistently use.

Improving office space utilisation can reduce fixed-property exposure, support changing team sizes and give employees better places to collaborate. Flexible workspace solutions provide a practical way to achieve this without removing the professionalism, privacy or control corporate teams require.

What is office space utilisation?

Office space utilisation measures how effectively a workplace is being used.

It considers the relationship between available capacity and actual use over time. This may include:

• The number of workstations occupied
• Meeting room usage
• Peak attendance levels
• Average daily attendance
• Space used by different teams
• Frequency and duration of office visits
• Demand for collaboration and private work areas

Office utilisation is different from office occupancy.

Office occupancy usually measures how many people are present at a particular time compared with the office’s total capacity. Office utilisation takes a broader view of how frequently and effectively the entire workplace is used.

For example, an office with 100 desks may reach 80% occupancy on Tuesday but sit below 30% on Friday. Although the office is busy at its peak, its overall utilisation across the week may remain poor.

The goal is not to keep every desk occupied every minute. That would create congestion and remove operational flexibility. The goal is to align the workplace with how people actually work.

Why do traditional offices become underused?

Underused offices are rarely caused by one poor leasing decision. They are often the result of several business changes occurring during a long lease term.

1. Hybrid work has changed attendance patterns

Employees may now divide their working week between the office, home, client locations and interstate travel.

This can produce highly uneven demand. Offices may be full in the middle of the week but largely empty on Mondays and Fridays.

A traditional lease continues charging for the entire footprint regardless of how often it is used.

2. The business has changed faster than the lease

A five or ten-year lease can outlast:

• Organisational restructures
• Mergers and acquisitions
• Market contractions
• New operating models
• Leadership changes
• Shifts in employee location
• Technology adoption
• Expansion into new cities

The workplace strategy agreed at the beginning of a lease may no longer fit the organisation several years later.

3. Space was leased for projected growth

Businesses often secure additional space based on future headcount projections. This can appear sensible when the lease is signed, particularly when suitable property is scarce.

If recruitment slows, automation changes staffing requirements or teams become more distributed, the business may carry unused capacity for years.

4. Office layouts no longer match employee needs

An office can be busy and still be poorly utilised.

Rows of unused individual desks may occupy most of the floor while employees compete for meeting rooms, quiet areas and collaboration space. The problem is not necessarily the total amount of space. It is the way that space has been allocated.

5. Teams have become geographically distributed

Growth does not always occur in one headquarters.

Businesses may need smaller teams in Sydney, Melbourne, Brisbane, Adelaide or regional centres. Expanding through separate conventional leases can create significant capital commitments, operational duplication and inconsistent employee experiences.

Flexible workspace solutions allow businesses to establish a presence in new markets without immediately building another permanent office.

The real cost of an underused office

Rent is only one part of the cost.

Traditional private office leasing can also involve:

• Fitout and design costs
• Furniture and equipment
• Utilities
• Cleaning
• Security
• Reception services
• Repairs and maintenance
• Technology infrastructure
• Meeting room systems
• Insurance
• Make-good obligations
• Property management resources
• Bank guarantees or security deposits

These costs continue even when attendance declines.

JLL reported that the average cost of a moderate-quality office fitout in Australia had reached approximately $3,011 per square metre. This highlights the capital exposure involved when businesses build space around uncertain future requirements. JLL Australia

Underutilisation also creates less visible costs.

An oversized, quiet office can weaken energy, reduce spontaneous interaction and create the impression that the organisation is contracting. Employees may attend the workplace and still feel disconnected.

A smaller, active and better-serviced environment can often deliver a stronger workplace experience than a larger office operating at half capacity.

How to identify an underused office

Before changing the workplace, establish how the existing space performs.

Measure attendance over several months

Avoid making decisions based on one unusually busy or quiet week.

Track attendance across:

• Different weekdays
• School holiday periods
• Major project cycles
• Team events
• Seasonal peaks
• Company-wide office days

This will reveal the difference between average demand and peak demand.

Audit each type of space

Measure the use of:

• Individual desks
• Private offices
• Meeting rooms
• Phone booths
• Training rooms
• Breakout areas
• Reception areas
• Storage
• Event or town hall spaces

A whole floor may appear underused while certain rooms are consistently overbooked.

Calculate utilisation rates

A basic workstation utilisation formula is:

Office space utilisation rate = occupied workstations ÷ available workstations × 100

If 48 of 100 available desks are typically occupied, workstation utilisation is 48%.

This calculation should be assessed by day and time, not only as a weekly average. Peak demand remains important when determining how much capacity the business requires.

Speak with employees

Data shows what is happening. Employee feedback can explain why.

Ask employees:

• What brings them into the office?
• What prevents them from attending?
• Which spaces are difficult to access?
• Where can they work most effectively?
• Do they have sufficient privacy for calls?
• Are meeting rooms available when needed?
• Does the location suit their commute and clients?

Low attendance may reflect poor location, outdated facilities or an unsuitable workplace experience rather than a lack of interest in office-based work.

When should a business replace its traditional office?

Replacing an office does not necessarily mean eliminating the workplace. It means replacing a rigid property model with one that fits current business requirements.

Common warning signs include:

• Average attendance is consistently well below capacity
• Space requirements vary significantly throughout the week
• A lease expiry or break date is approaching
• The business expects uncertain headcount growth
• Teams are expanding into multiple Australian cities
• Fitout or refurbishment costs are becoming difficult to justify
• Meeting rooms are overloaded while desks remain empty
• The organisation is carrying multiple small, disconnected leases
• Property management is consuming too much internal time
• The existing workplace no longer supports the employer brand

These are signals to review the model, not simply reduce floor space.

How flexible workspace improves office space utilisation

Flexible workspace shifts the focus from owning or leasing a fixed footprint to accessing the space the organisation needs.

Match capacity to real demand

A flexible workspace can combine:

• Secure private offices
• Shared business lounges
• Bookable meeting rooms
• Project rooms
• Event spaces
• Day offices
• Casual workspace access
• Short-term expansion space

Instead of including every possible requirement inside one tenancy, the business can maintain a right-sized private office and access additional facilities when required.

Scale without another major fitout

When a team grows, the business may be able to add offices, desks or project space within the same location or wider network.

This supports scaling office space without immediately committing to another long lease, new fitout or separate operating infrastructure.

Manage peak attendance more effectively

A business does not need to lease enough dedicated space for every employee to attend simultaneously if full attendance occurs only occasionally.

Flexible meeting, event and collaboration spaces can absorb peak demand while the permanent footprint remains aligned with normal usage.

Expand into new Australian markets

A flexible workspace network can provide a consistent workplace experience across multiple cities.

Teams can enter a new market, support travelling employees or test regional demand before committing to permanent premises.

This is particularly valuable when growth forecasts are strong but the timing and location of that growth remain uncertain.

Convert fixed costs into more adaptable commitments

Conventional offices generally involve long-term fixed obligations. Flexible workspace can allow businesses to align commitments more closely with current team size and operating needs.

The result is not simply a shorter agreement. It is a more responsive corporate real estate strategy.

Flexible workspace versus traditional private office leasing

The right choice depends on team size, security requirements, growth plans, balance sheet priorities and expected length of occupancy.

For many mid-market organisations, a blended strategy works best.

Consider a hub-and-spoke workplace strategy

Businesses do not always need to choose between one major headquarters and a completely remote workforce.

A hub-and-spoke strategy may include:

• A central corporate headquarters
• Flexible satellite offices in key markets
• Project spaces near clients
• Business lounge access for mobile employees
• Meeting and event space available on demand

This approach gives the organisation a strong central identity while creating greater access for distributed teams.

It can also help reduce the pressure to make one office serve every employee, client and business function.

Seven steps to replace an underused office

Step 1: Establish the current cost per user

Calculate the total annual workplace cost, not only the rent.

Include property, fitout depreciation, utilities, cleaning, technology, security, maintenance and internal management costs. Compare this figure with the average number of employees actually using the office.

Step 2: Build an attendance profile

Identify:

• Average daily attendance
• Peak attendance
• Attendance by team
• Most popular office days
• Meeting room demand
• Seasonal changes

This creates a more reliable basis for determining future capacity.

Step 3: Define the purpose of the office

Decide what the workplace must achieve.

Is it primarily for:

• Focused work?
• Team collaboration?
• Client meetings?
• Training?
• Culture and connection?
• Project delivery?
• Leadership visibility?
• Recruitment and retention?

A workplace designed around its purpose will outperform one designed around a headcount spreadsheet.

Step 4: Separate permanent needs from occasional needs

Determine which requirements must be dedicated and which can be shared or booked when needed.

For example, secure team offices may need to remain private, while boardrooms, training rooms and event spaces may only be required several times per month.

Step 5: Compare complete occupancy costs

Compare conventional leasing and flexible workspace on a like-for-like basis.

Include:

• Rent
• Outgoings
• Fitout
• Furniture
• Technology
• Cleaning
• Utilities
• Security
• Reception
• Maintenance
• Meeting and event facilities
• Make-good exposure
• Expansion costs
• Internal management time

The lowest advertised desk rate is not always the lowest total workplace cost.

Step 6: Test the new model

Use a pilot location, project team or satellite office to test attendance, employee feedback and operational requirements.

A pilot creates real evidence before the organisation makes a broader portfolio decision.

Step 7: Retain room to move

Negotiate for the business you may become, not only the business you are today.

Consider:

• Expansion and contraction options
• Access to additional offices
• Multi-location usage
• Meeting room availability
• Branding rights
• Technology and security
• After-hours access
• Renewal options
• Service-level expectations

Flexibility should exist in practice, not just in the sales language.

What should corporate buyers look for in a flexible workspace?

Not every flexible office is designed for corporate use.

Mid-market buyers should assess:

Privacy and security

Review physical access, visitor management, office security, network options and confidential meeting facilities.

Professional presentation

The workplace should provide an environment suitable for employees, clients, investors and partners.

Reliable technology

Confirm internet resilience, video conferencing capability, IT support and any requirements for dedicated connectivity.

Expansion capacity

Ask whether the provider can support additional people, project teams or new geographic markets.

Service consistency

Reception, cleaning, maintenance and onsite support should operate to clear standards.

Commercial transparency

Understand what is included, what is charged separately and how rates may change if the team expands.

Employee experience

Location, transport, natural light, amenities and hospitality all influence whether employees will choose to use the workplace.

Australia’s broader office market continues to show a preference for higher-quality environments. Property Council data from July 2025 showed stronger occupancy growth in premium office stock while occupied levels declined across lower office grades. Property Council of Australia

Quality matters because improving utilisation is not only about reducing space. It is about creating a workplace people value enough to use.

A more flexible workplace is a lower-risk growth platform

An underused office is not simply empty space. It is capital, commitment and operational energy that could be deployed elsewhere.

The answer is not to eliminate the office or chase the smallest possible footprint. It is to build a workplace portfolio that can respond as the business changes.

Flexible workspace can help organisations:

• Improve office space utilisation
• Reduce unnecessary fixed-property exposure
• Support hybrid work
• Enter new markets
• Accommodate project teams
• Improve workplace quality
• Scale without repeated fitouts
• Provide a consistent employee experience

A basketball team does not keep the same five players on the court regardless of the score, opponent or stage of the game. It adjusts the line-up to suit the moment.

Your workplace strategy should have the same ability to move.

Replace unused capacity with workspace that performs

CorporateCubes.Co provides premium, flexible workspace solutions for established businesses, professional teams and organisations expanding across Australia.

From secure private offices and meeting facilities to project space and multi-location solutions, we help businesses create workplace strategies aligned with actual demand, not outdated assumptions.

Speak with the CorporateCubes.Co team to review your current workspace requirements and explore a more flexible path forward.

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Frequently asked questions

What is a good office space utilisation rate?

There is no universal target. The right rate depends on work patterns, peak attendance, collaboration requirements and the amount of operational buffer required. Businesses should evaluate average and peak utilisation rather than relying on one percentage.

How do you calculate office space utilisation?

A simple calculation divides the number of occupied workstations by the total number of available workstations, then multiplies the result by 100. A complete assessment should also measure meeting rooms, collaboration areas and patterns across different days and times.

What is the difference between office occupancy and office utilisation?

Office occupancy measures how many people are present relative to capacity at a particular time. Office utilisation measures how frequently and effectively different parts of the workplace are used over a longer period.

Why are corporate offices underused?

Common causes include hybrid work, inaccurate growth forecasts, organisational restructuring, distributed teams and office layouts that no longer match employee needs.

Can flexible workspace accommodate corporate teams?

Yes. Corporate-grade flexible workspaces can provide secure private offices, dedicated connectivity, meeting rooms, reception services, branding opportunities and room for expansion. Buyers should verify that the provider meets their privacy, security and service requirements.

Is flexible workspace more affordable than private office leasing?

It can be, particularly when fitout, furniture, utilities, cleaning, meeting rooms, maintenance and make-good obligations are included in the comparison. The correct assessment is based on total occupancy cost, not rent alone.

How can flexible workspace support interstate expansion?

Businesses can establish teams in new cities without immediately taking separate conventional leases. Flexible workspace can also support travelling employees, temporary projects and market testing.

Should a company replace its headquarters with flexible workspace?

Not necessarily. Some organisations retain a central headquarters and use flexible workspace for satellite teams, overflow, projects and interstate expansion. The right model depends on the organisation’s strategy, culture and operational requirements.

What happens if the team grows after moving into a flexible office?

A suitable provider may offer additional offices, desks, meeting facilities or access to other locations. Expansion options should be discussed and documented before signing an agreement.

How often should office utilisation be reviewed?

Corporate teams should review utilisation at least quarterly and before lease renewals, break dates, restructures or major hiring programs. More frequent monitoring may be appropriate during rapid growth or workplace policy changes.