Property Australia

Breathing life back into our CBDs

Karen Jamal Karen Jamal October 12, 2021

Office occupancy in Sydney’s CBD remains at 4%, Melbourne at 6% and Canberra at 8%. As lockdowns lift, how will we bring our CBDs back to life?

 

Three key takeaways:

  • The Property Council’s office occupancy survey for September confirms the ongoing impact lockdowns on Australia’s largest city centres as they prepare for a phased reopening over coming weeks.
  • Occupancy levels for cities not enduring lockdowns remain largely consistent with results recorded in previous months.
  • Over three quarters of respondents said they do not expect to see a material increase in CBD office occupancy levels within the next three months.

 

October and November will be important months for Australia’s largest CBDs, says Property Council chief executive, Ken Morrison.

“With New South Wales, Victoria and the ACT all both committed to a path out of lockdown, CBD office owners and managers are working to prepare their assets for the return of vaccinated workers,” Morrison says.

Building owners, employers and all levels of government must work together to “bring our CBDs back stronger than ever,” Morrison adds.

“This isn’t just about the coffee shops, dry cleaners and restaurants. The activity in our CBDs support millions of jobs and generate hundreds of billions of dollars broader economic activity.”

In Melbourne, where office occupancy is currently sitting at six per cent, vaccination and testing sites at major offices will play a key role in bringing people back, says Property Council executive director in Victoria, Danni Hunter. She also wants the reinstatement of the mandate requiring public sector workers visit their office three days a week, once it is safe to do so.

“On the other side of Christmas, with vaccination rates at really high levels, we think offices will really start to hum,” she says.

In Sydney, with just four per cent of CBD office workers sitting at their desks, Luke Achterstraat, the Property Council’s NSW executive director, is hopeful that confidence will return “between now and Christmas”. He says initiatives like the state government’s $50 million investment in CBD dining vouchers and the closure of the Cahill Expressway for a New Year’s Eve party will play an important role in revitalising the city centre.

 

FOMO Fridays

Daniel Gannon, the Property Council’s executive director, has been championing the FOMO Fridays campaign in Adelaide, which wrapped up on the weekend after a month of fun and festivities.

The campaign called on office workers to “unplug from boredom, ditch the UGG boots and reconnect with your workmates” every Friday. The city centre was fizzing with fun: yoga in the park, bands, buskers and DJs, not to mention discounted parking brought people back to the CBD.

“FOMO Fridays was designed to encourage more workers back into the office, but also to enjoy Adelaide and our comparative resilience and openness,” Gannon says.

“As a direct result of this initiative, the roads feel busier, CBD car parks are filling up and small businesses are buzzing.”

In the same ‘call to arms’ spirit, #GoToTown has been launched to get people rallying behind businesses in the Adelaide CBD. “FOMO Fridays forms a key pillar in that campaign, dovetailing perfectly with its objective,” Gannon adds.

“In simple terms, we are encouraging white-collar workers to get back to the office to help save businesses and jobs. FOMO Fridays is helping to deliver this outcome.”

 

Bringing home to work

Office landlords have invested in activation, technology and state-of-the-art cleaning services to ensure their buildings are safe. But design firm Hames Sharley says there is another trick to lure people back. Hames Sharley’s principal and workplace portfolio leader, Stephen Moorcroft, and associate Louisa Glennon expect tenants to demand more relaxed workplaces that replicate the domestic environment of home.

Office landlords have invested in activation, technology and state-of-the-art cleaning services to ensure their buildings are safe. But design firm Hames Sharley says there is more needed to attract people back. Hames Sharley’s principal and workplace portfolio leader, Stephen Moorcroft, expects tenants to demand more relaxed workplaces that “replicate the alternative and often segregated domestic environments of home”.

“As our attitudes to the appearance of professionalism may have relaxed at the dining table video conference, its highly likely the workplace will follow suit,” Moorcroft says. “We’re expecting the sector blend between workplace, residential and hospitality design to mix even further with warmer colours, more planting, natural materials, great artwork, feature lighting, and fewer hard edges and clean lines.”

Workplaces will encourage employee interaction with more collaboration space – meeting rooms, casual lounge areas, and games rooms. There will be more spaces where family and even pets are welcome to visit. That will include “private spaces for mothers to feed their babies, games areas for older children to play, or family rooms with TVs and microwaves so relatives can bring in food to eat”.

As the property industry continues to innovate, Ken Morrison has a clear call to action for governments. “Thriving CBDs aren’t an optional extra,” he says. “We need our commercial centres reactivated if Australia is to replicate the strong economic recovery we experienced following last year’s lockdowns.”

 

Table 1: Office occupancy by city CBD

131021 - Story 1 - Table 1

Note: Figures are based on responses from Property Council members who own or manage CBD office buildings and cover occupancy for the period from 23-30 September 2021.

 

Graph 1: Office occupancy peak and low days by city CBD131021 - Story 1 - Table 2

 

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