CBD office occupancy rates rise as workers return

Office workers are flocking back to CBDs across the nation despite Covid and a rising number of flu cases.

The Property Council of Australia’s latest Office Occupancy survey found office workers flooded back to Adelaide’s CBD in May, with the city’s occupancy climbing from 59 to 71 per cent.

Office workers also returned enmasse to the Canberra CBD with occupancy rates rising from 39 per cent to 60 per cent.

Property Council Chief Executive Officer Ken Morrison said occupancy levels in Perth and Brisbane jumped 13 per cent, to 63 and 64 per cent respectively.

In Sydney, occupancy rates climbed from 42 per cent in April to 55 per cent in May, while Melbourne’s rate rose from 36 per cent to 48 per cent.

It’s a sharp turnaround from 2021 when Sydney’s office occupancy rate fell to 4 per cent in August, while Melbourne’s also dropped to 4 per cent in October.

“What we’ve seen this month is a consistent and sizeable lift in the numbers of people returning to the office across all CBDs,” Mr Morrison said.

“More individuals and workplaces are embracing the benefits of face-to-face connection and CBDs are regaining much of their vibrancy.

“This positive lift has occurred at a time when Covid and now the flu are circulating widely, forcing many people and families to stay home or isolate, on top of some extremely wet weather on the east coast.

“Despite the challenging environment, it’s very pleasing to see plenty of people returning to their workplaces, with occupancy on peak days reaching 80 per cent in Adelaide, 73 per cent in Brisbane and 66 per cent in Sydney,” he said.

Office occupancy rates. Source: The Property Council of Australia

Mr Morrison said flexible working would remain stronger than pre-pandemic, but he expected the trend of workers returning to the office to continue.

“While flexible working is here to stay, there is a value in face-to-face connection that can’t be replicated over a screen,” Mr Morrison said.

“Our latest Office Market Report shows that this jump in occupancy is matched by strong demand for office space from tenants, despite the impacts of the pandemic.

“Strongly growing white collar employment also paints a positive picture for the future of our CBDs,” he said.

The latest office occupancy survey found the preference for greater flexibility, including working from home, was the major driver of occupancy levels, and more than 50 per cent of respondents believed it would take three months or more for occupancy levels to materially increase.

“Many businesses and building owners are embracing change and evolving the role of the workplace for their teams,” Mr Morrison said.

“It is clear is that CBDs will continue have a very strong role to play in a post Covid world, even as businesses and their employees evolve to new ways of working,” Mr Morrison said.

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