Property Australia

CBD occupancy key to economic momentum

Karen Jamal Karen Jamal March 30, 2021

More workers returned to CBDs in Melbourne, Sydney and Perth in March, according to the Property Council’s latest office occupancy figures.

 

  Three key takeaways:

  • Melbourne’s CBD took a significant step forward following last month’s health restrictions, recording 35% occupancy in March (up from 24% in the final week of February), according to the Property Council’s latest office occupancy survey
  • Perth experienced a post-lockdown jump from 65% to 71% occupancy while Sydney’s occupancy increased two points to 50%.
  • All other capitals recorded a relatively consistent number of workers returning to their offices from February to March.

 

Reactivating CBDs remains a major opportunity to maintain the momentum of Australia’s economic growth, says Property Council chief executive Ken Morrison.

“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,” he says.

Before the COVID-19 pandemic, more than one million people worked in Australia’s CBDs. Sydney and Melbourne account for 15 per cent of Australia's GDP, according to a new report from the Property Council and EY.

While our CBDs are “increasingly becoming reactivated” there is more work ahead “before they are once again firing on all cylinders,” Morrison says.

Almost half of survey respondents identified worker preferences for greater flexibility as the main barrier to 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,” Morrison says.

The survey found a growing number of office building owners and managers are not expecting to see a material increase in occupancy levels within the next three months.

Australia’s biggest banks have committed to bring tens of thousands of their employees back to offices. “As more of our colleagues return to the office we are seeing the benefit of collaborating, team planning and problem solving while at the same time supporting them to work flexibly,” National Australia Bank chief executive Ross McEwan told the Australian Financial Review last week.

Federal treasurer Josh Frydenberg has also been championing CBD reactivation. “More people back at their desks in our cities means more jobs for the many retail, hospitality, accommodation and other businesses that rely on their presence,” Frydenberg has said.

Morrison says planning is “well advanced” in several cities to entice workers back with coordinated programs of activations and attractions. “It is critical that policymakers and employers come on the journey with industry over the coming months to boost office occupancy levels.”

Office occupancy by CBD

CBD

Dec 2020

Jan 2021

Feb 2021

Mar 2021

Melbourne

13%

31%

24%

35%

Sydney

45%

45%

48%

50%

Brisbane

61%

63%

64%

62%

Canberra

65%

68%

65%

65%

Adelaide

68%

69%

69%

71%

Hobart

76%

80%

76%

80%

Perth

77%

66%

65%

71%

Darwin

82%

80%

80%

84%

 

Figures are based on responses from Property Council members who own or manage CBD office buildings and cover occupancy for the period from 23 to 29 March 2021.

Tags: COMMERCIAL