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Office occupancy levels hold steady in June

The number of workers returning to CBD offices slowed last month, as floods, the flu and interruptions to rail networks forced people to stay home.

According to the Property Council of Australia, Perth’s office occupancy rate continued to improve between May and June (63 to 65 per cent), Melbourne’s lifted slightly (48 to 49 per cent), while occupancy levels in the ACT declined (60 to 53 per cent), with rates in other major cities including Sydney (55 per cent) remaining steady.

Property Council of Australia Chief Executive Officer Ken Morrison said workers were keen to return to the office but were forced to stay at home in June.

“Although office occupancy rates have steadily recovered since the beginning of the year, this month there was a clear pause in workers heading to the office,” Mr Morrison said.

“These results are somewhat disappointing given recent gains, but they’re also not surprising given the events we’ve faced.

“The continued spread of COVID-19 and other illnesses, extremely wet weather on the east coast, combined with industrial action in NSW have all clearly hampered workers being able to get into their CBD workplaces.“

Mr Morrison expects occupancy to lift again once the current unfavourable impacts subside.

“I don’t think these figures are a reflection of workers not wanting to be in the office, but rather a reflection of people being forced to stay home for a range of reasons, whether it be to care for sick kids, rest themselves or to avoid dangerous weather,” he said.

Adelaide recorded the highest occupancy levels across the country, remaining stable at 71 per cent, followed by Perth (65 per cent), then Brisbane, which also remained at 64 per cent. 

Property Council’s NSW Executive Director Luke Achterstraat said Sydney had previously seen an encouraging eight-fold increase from 7 per cent occupancy in January to 55 per cent in May.

“Last month we have faced disruptions to our train network, strikes, inclement weather and waves of COVID-19 and the flu, which have inevitably kept people at home,” Mr Achterstraat said. 

“Given all these factors, it is encouraging to see office occupancy has remained at 55 per cent and has not gone backwards. 

“One month of data does not equal a trend, so now is the time for government and employers to double down and maintain momentum for the return to the office. 

“Now is not the time to be bringing back conversations about work from home advice or mask mandates in offices.” 

Capital city CBD occupancy rates. Source: The Property Council of Australia

The latest office occupancy survey found the preference for greater flexibility including working from home was the major driver of occupancy levels, while 79 per cent of respondents (up from 63 per cent in May) believe it will take three months or more for occupancy levels to materially increase. 

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Rowan Crosby

Rowan Crosby is a freelance journalist specialising in finance and real estate.