The latest Property Council of Australia office occupancy survey has revealed more workers are returning to capital city CBDs, with figures showing Melbourne, Sydney, and Perth recorded a rise in occupancy levels in March.
Rates in Melbourne’s CBD took a significant step forward after the further easing of health restrictions in the Victorian capital, recording 35 per cent occupancy in March, up from 24 per cent occupancy in the final week of February.
Occupancy levels in Perth also rose from 65 per cent to 71 per cent, and Sydney increased two points to 50 per cent.
The occupancy rate in Darwin rose from 80 per cent to 84 per cent in March; from 76 per cent to 80 per cent in Hobart; Adelaide was up 71 per cent from 69 per cent; Canberra remained unchanged at 65 per cent and Brisbane rates dropped one point to 63 per cent.
But despite the relatively steady increase in the number of workers returning to CBDs, the survey found a growing number of office building owners and managers were not expecting to see a material increase in occupancy levels within the next three months.
Property Council Chief Executive Ken Morrison has reiterated reactivating the nation’s CBDs represented a major opportunity to maintain the momentum of Australia’s economic growth “but we have more to be done before they are one again firing on all cylinders”.
“City centres need to be driving the next stage of economic recovery as government stimulus and support measures wind down,” Mr Morrison said.
“Millions of jobs and hundreds of billions of dollars in broader economic activity are reliant on a high level of activity within Australia’s CBDs.”
According to almost half of survey respondents, worker preferences for greater flexibility was the main barrier to achieving full occupancy.
Government restrictions and public transport concerns are diminishing as influencing factors.
“Greater flexibility will be a hallmark of the post-pandemic workplace, but the current rate of office occupancy – particularly in Melbourne and Sydney – is still well short of where it needs to be to support those thousands of businesses who rely on CBD foot traffic,” Mr Morrison said.
He said cafes, restaurants, shops and other businesses that rely on office workers being back in CBDs, particularly in Melbourne, have been slower in reducing their reliance on JobKeeper subsidies and “will be feeling the pressure over months”.
Mr Morrison has welcomed the commitment from Australia’s leading banks to bring tens of thousands of their employees back to offices to help revive activity in city centres.
“It has been encouraging to see the Federal Treasurer urging corporate leaders to consider the role their workforces can play in stimulating recovery in our CBDs,” he said.
“Employers who are leading by example are benefitting from face-to-face connections and collaboration as well as helping to supercharge Australia’s economic resurgence.”
Mr Morrison said that the property industry was taking the initiative to entice workers back to Australia’s commercial centres through a program of activations and attractions.
Earlier this month, the Property Council announced the ‘Fab Fridays’ scheme, which is set to launch on April 23, to encourage more workers into Melbourne CBD.
“Flexibility is here to stay, so CBD stakeholders need to work twice as hard to motivate workers to want to be in our city centres,” Mr Morrison said.
“Planning is well advanced in a number of cities for concerted efforts between building owners, governments and other stakeholders to encourage workers back to their offices.”
The Property Council’s NSW Executive Director Jane Fitzgerald said the NSW Government, in partnership with the City of Sydney, has been undertaking a wide range of CBD activation projects across the city.
“Lots of great projects are happening at an employer, landlord, city and state level to encourage people back to the city,” Ms Fitgerald said.
“Sydney CBD is the beating heart of our state and is Australia’s global city. We need people to come together to embrace the city for all that it offers – a chance our international friends could only dream about in their current lockdowns.”
The Property Council said Sydney’s CBD represented seven per cent of Australia’s economy and generated about $130 billion in economic activity in 2018-19 and ordinarily hosts 14.5 per cent of NSW’s entire workforce.
