Melbourne's office market is at a crossroads and if you're a business leader with leases expiring in the next few years, the decisions you make now will define your workplace for the decade ahead.

In this recording of JLL's Melbourne Future Forward panel event Westpac's Mark Rose reveals why his team needed three full years to execute their 48,000 sqm office strategy, and why waiting until 18 months out is already too late. You'll discover the hidden truth behind Melbourne's headline 20% vacancy rate: while the media talks about abundant space, finding premium, contiguous floors that meet modern standards is a completely different story.

Charter Hall's Andria Carniato shares how the company leased 111 Bourke Street to 95% in just 16 months during a down market, and the portfolio strategies that unlock value most tenants never see. Connor McCauley, JLL sustainability expert, breaks down the embodied carbon equation that's reshaping fit-out decisions, with real examples of how Australia Post's workstations found new life at CBA.

Whether you're managing 50,000 sqm or 5,000, this conversation will change how you think about timing, sustainability, and the tenant-landlord relationship. The question isn't if your next move matters, it's whether you're starting early enough to get it right.

TRANSCRIPT - JLL Future Forward - Melbourne Panel 30.07.26

Mark, thinking back on your last office move, what's one thing you wish someone had told you three years out?

Adelaide's a very funny market. It's probably the story that Annabel talked about in Melbourne with high vacancy, but very limited vacancy in the premium grade assets. We did that, and we would've locked in probably for longer, and for more space, if we had known the growth story that was coming over there in terms of rents that they were attracting after we did our deal.

Andria, you've seen a lot of office moves over your time being a landlord. What's something you would recommend to occupiers if they had a long lead time from a landlord's perspective?

Often a landlord, if there is a level of trust and really good communication, sometimes we know what the tenant's probably going to do before they do, to be honest. The earlier that we can open the dialogue and have those types of conversations, the easier it becomes for everybody, and the better outcome everybody gets. As a landlord, to be totally honest with you, a full building is worth more than an empty one. Whilst everybody is there to maximise their outcomes, there's always a happy medium where a tenant has some comfort about what they've got and locked in a good deal and rent for a period of time, and so is a landlord. Not everybody's always going to get what they want, but as long as everybody goes in understanding that and trying to find that partnership approach, it's going to be a good outcome.

Connor, what's the most common thing landlords and tenants get wrong about each other?

It's really up to the pilot and the hostesses or hosts as the landlord, and all of the passengers as the occupiers, to set that location together. Really how they do that is when they get the ticket—the lease. Let's make sure that we know where we're going, it's going to be comfortable, and we know we're going in the same direction. We all have similar targets, so let's just set that out in our ticket or lease upfront and get on with it. There's not much cost that goes into that, but we know we're going in the same direction.

00:04:53 — Connor: Exactly.

Andria, can you walk us through what 20% vacancy really represents? What's actually available today for a 5,000 square metre tenant wanting a prime location and modern amenity?

From a landlord's perspective, we see 20% vacancy and acknowledge it's probably not quite as dire as it sounds, but I've got a really good example at 111 Bourke Street. Essentially, I had an East End option with a material contiguous bit of space. The competition I was dealing with would consider what I had to work with as secondary stock or secondary locations. Regardless of whether I think my product is prime grade with a 5,000 square metre contiguous space, the reality is that tenants still have a level of choice if they are willing to compromise on certain elements or if value plays a critical part in their decision making.

You can't pretend it doesn't exist, or that just because you are East End, over 5,000 square metres, fully electrified, with great ESG credentials, that there aren't other choices.

Mark, when Westpac went to market in 2022 for your 2026 expiry, what surprised you about the options that were generally on the table or weren't?

It was the amount of things that came out four years ago that probably wouldn't today. I think people have become even more real with rents and what it takes to make something stack.

Speaking of three years, Mark, did that feel like the right amount of runway for Westpac, or was it driven by internal complexity? What would you say to a tenant expiring in 2029 who thinks they've got plenty of time?

There's no point running a market process if you don't have enough time to actually make the move, do a fit-out, and get out of your existing premises by lease expiry, because no one's doing you any favours. It's not fair to the landlord cohort to go out on a fishing expedition or market testing exercise for a process that's never going to go anywhere.

Andria, from the landlord side, how does early tenant engagement change what you're able to deliver? What's the real risk for a tenant who waits until 18 months prior to expiry?

570 Bourke Street is a really good example. We knew we had upcoming material expiries and needed to plan two or three years ahead to deliver that asset—either to engage well with existing tenant customers around renewals or to attract new tenants to a secondary location in the Western core. We needed to invest upfront before that time.

We do annual NPS surveys and monthly strategic meetings to understand what tenants want, which is often around amenity, community, and how it feels when they walk in. That early planning and execution builds trust. Full buildings are worth more than vacant ones; if it minimises downtime and keeps tenant customers happy, the flow-on effect to investors makes perfect sense for us.

Mark, can you unpack how Westpac weighed staying and refurbishing the existing fit-out versus moving to a brand-new building? Was the embodied carbon piece hard to quantify?

We ended up staying where we are and are going through a refurbishment. We kept the bones of our existing fit-out, completely changed the look, repurposed and reused where we could. It hasn't necessarily been much cheaper, but we were very deliberate about avoiding ripping out the fit-out to build new because of the embodied carbon story.

00:17:07 — Mark: It's hard to get direct comms to everyone in a big company, but we have played that back to people. We've had other good reuse stories, like in Adelaide where we packed up good workstations from our old office and moved them down the road. It wasn't about saving heaps of money, but reducing embodied carbon and waste to landfill, which is a big issue for us. It was the right thing to do.

Andria, Charter Hall has repositioned older assets to meet rising sustainability expectations. Without triggering capital churn, is it hard to justify?

The all-electric plant and strong ESG credentials resonated with the market. It was a material consideration in terms of capital investment, but it paid off in spades: over the last 15 to 16 months, we went from zero to 95% leased in a market with 20% vacancy. It's fully electrified across office and retail—though I do still have a diesel generator!

00:22:24 — Connor: It's mainly driven by landlords at the moment. Lendlease developed a fit-out guide providing embodied carbon metrics. Dexus launched the "Forever Fitout" offering furniture leasing, and JLL kicked off a Furniture Solutions Business out of Hong Kong.

While furniture makes up about 20% of a fit-out's embodied carbon, 35% is in partitions, ceiling tiles, and floor tiles, which can be recycled and reused. Additionally, space planning tech now allows real-time quantification of embodied carbon before diving deeper into design.

00:23:18 — Andria: Early on, a TR out of Sydney represented CBA for space at 435 Bourke Street and asked what we were doing with the workstations at 111 Bourke. We had just secured EY, who didn't need the workstations.

00:26:01 — Moderator: Andria, Charter Hall thinks about the portfolio as a jigsaw puzzle, not just a single asset. Can you give an example of moving a tenant between buildings to unlock a bigger outcome?

00:27:58 — Moderator: JLL is a prime example—we were stacked down to accommodate another tenant who needed more space, and it worked out well. Regardless of tenancy size, landlords are always thinking about lease expiries.

Mark, you said location can be negotiable if costs, sustainability, and workplace quality line up. What does a landlord need to deliver in a B location to make it a real "A" option for you?

00:31:51 — Moderator: In closing, what's one thing you want everyone in this room to tell their leadership team at their next meeting?

00:32:18 — Mark: Get past the headline vacancy numbers. Finding a 5,000 square metre contiguous chunk with specific requirements is different from what an MD reads in the paper. Second, get clear on your requirements, decision-making, and what you can or cannot compromise on.

00:33:49 — Moderator: Thank you. I'll open it up to the room now if anyone has questions for our panel.

00:34:26 — Andria: It's a balance of both. There are pretty good bones in most existing fit-outs. If the built form is in the right spot, there are immediate savings. At both assets, we've reused upward of 90% of the built form—replacing carpets, ceiling tiles, paint, and styling to make it feel unique to the incoming tenant. It allows us to be cost-conscious, environmentally considerate, and still offer a great incentive.

By introducing third spaces and ground-floor investments at 570 Bourke, an asset that typically wouldn't compete with 600 Bourke or the Rialto now does.

If there are no further questions, reach out to us at any time. I'll hand it back over to Jess.