MELBOURNE CBD IN CRISIS AS OFFICE OCCUPANCY CONTINUES TO PLUMMET

Melbourne’s office occupancy has plunged to its lowest level since the end of last year’s 112-day lockdown as the CBD continues to languish.

The Property Council survey showed office occupancy in Melbourne’s CBD fell to just 12 per cent in July, down from 26 per cent in June and the lowest level since October last year, in more bad news for retail, hospitality, and other businesses reliant on the presence of office workers.

Apart from Sydney, where office occupancy dropped to six per cent in July as the city endures a protracted lockdown, Melbourne’s occupancy levels have remained behind the rest of Australia’s capital cities since COVID started.

Victorian Executive Director Danni Hunter said: “After climbing back to 45% of pre-COVID levels in April this year, office occupancy in our CBD has continued to go backwards as Victoria had endured repeated lockdowns in recent months.

“All of the gains of earlier this year have now been lost as workers have again deserted the CBD with no sign of a bounce back as we endure our third lockdown in as many months. It follows last week’s Office Market Report which showed vacancy rates in Melbourne’s CBD are now at a 20-year high and demand is the lowest since the recession of the 1990s.

“Until vaccination rates increase, we face the prospect of more lockdowns. Clearly our CBD is in crisis and needs urgent attention. We have seen a number of survival plans but we now need a plan for revival. 

“The plan needs to address how we attract people safely back into the CBD, support our iconic retail and hospitality sectors and attract new, long-term investment so Melbourne continues to be a place to live, work and invest.

“We need to bring together all the key stakeholders including the Victorian Government, City of Melbourne and business to look at innovative ways we can revitalise our CBD. We’ve seen a continued population drift away from Melbourne to regional areas and other states like Queensland and we need to act now to prevent further drift.

“We need to focus on solutions that attract Victorians back to the city through transport incentives, proper long-term planning, meaningful investment, a world-class program of sporting, arts and other cultural events and a strategic return of the education sector. 

“A concerted effort is what we need, across government, the City of Melbourne and the business sector to not just support the CBD but enable it to grow and flourish once again.”

 

Office occupancy as a percentage of pre-COVID levels by CBD

 

NOTE: The Property Council’s CBD office occupancy data is presented as a percentage of the pre-COVID rate of office occupancy, which is estimated at 90%. If a CBD achieves the same level of occupancy as the pre-COVID norm this is presented as “100%”.

 

 

Mar-21

Apr-21

May-21

Jun-21

Jul-21

Sydney

56%

65%

68%

67%

7%

Melbourne

39%

45%

45%

26%

12%

Adelaide

79%

78%

78%

80%

15%

Brisbane

69%

70%

71%

71%

67%*

Canberra

72%

70%

71%

72%

73%

Perth

79%

78%

77%

76%

78%

Darwin

93%

93%

93%

88%

89%

Hobart

89%

91%

93%

89%

95%


Figures are based on responses from Property Council members who own or manage CBD office buildings and cover occupancy for the period from 26-28 July 2021.

Media contact: Eric Allilomou M: 0448 291 236 E: [email protected]