Data reveals progress towards CBD reactivation

The Property Council of Australia’s latest office occupancy survey has revealed a big step up in activity in the CBDs of Sydney and Melbourne despite the cities still lagging behind other capitals.

Sydney’s CBD took a significant jump forward in April, rising to 59% occupancy after recording 50% in March. Melbourne’s CBD increased from 35% to 41% occupancy over April.

All other capitals recorded a relatively consistent number of workers returning to their offices from March to April, with Perth CBD’s occupancy impacted by the recent snap lockdown.

Property Council Chief Executive Ken Morrison said that the results demonstrate welcome progress towards the reactivation of our city centres.

“The benefits of bustling CBDs are significant, not just for the small businesses that rely on city foot traffic, but for the broader Australian economy,” Mr Morrison said.

“Melbourne and Sydney have been the cities hardest hit by the COVID disruption and it is encouraging to see the big number of workers returning to these CBD in recent months.”

“But Melbourne still has a long way to go and more State Government leadership is needed to encourage public servants back to the office to bolster this recovery.”

Almost half of survey respondents identified worker preferences for greater flexibility as the main barrier to achieving full occupancy. Government restrictions and public transport concerns increased as an influencing factor following several localised lockdowns in recent months.

“As expected, we are continuing to see isolated COVID cases having an impact on activity within CBDs,” Mr Morrison said.

“Flexibility will continue to be a major feature of working in the post-pandemic world, but there is clearly still a long way to go until our CBDs reach the levels of occupancy anticipated in the new normal.”

Mr Morrison said that the property industry was taking the initiative to entice workers back to Australia’s commercial centres through a coordinated program of activations and attractions starting in May.

In Melbourne, the Property Council has launched FOMO Fridays in conjunction with the City of Melbourne and the Australian Retailers Association. In Brisbane, the Fridays in the City initiative will bring together reactivation efforts in partnership with Brisbane City Council and other CBD stakeholders. Similar initiatives are in development in other capitals.

“These campaigns are aimed at encouraging city workers to rediscover what’s great about their CBDs with numerous activities, events and freebies on offer,” Mr Morrison said.

“Building owners and managers are not waiting for government leadership to drive CBD reactivation, we are proactively making the case for workers to return to their offices and reengage with all the benefits of face-to-face working.”

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

Office occupancy by CBD

CBD

Jan 2021

Feb 2021

Mar 2021

Apr 2021

Melbourne

31%

24%

35%

41%

Sydney

45%

48%

50%

59%

Brisbane

63%

64%

63%

63%

Canberra

68%

65%

65%

63%

Adelaide

69%

69%

71%

70%

Hobart

80%

76%

80%

82%

Perth

66%

65%

71%

70%*

Darwin

80%

80%

84%

84%

Figures are based on responses from Property Council members who own or manage CBD office buildings and cover occupancy for the period from 27 – 30 April 2021.

*Results for Perth were recorded during the recent lockdown, but reflect an overall assessment of occupancy for the month of April.

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