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CBD occupancy key to economic momentum

The Property Council of Australia’s latest office occupancy survey has revealed that more workers returned to CBDs in March with Melbourne, Sydney and Perth increasing their occupancy levels over the last month.

Melbourne’s CBD took a significant step forward following last month’s health restrictions, recording 35% occupancy in March - up from 24% occupancy in the final week of February. Perth also experienced a post-lockdown jump from 65% to 71% occupancy. Occupancy levels in Sydney increased two points to 50%.

All other capitals recorded a relatively consistent number of workers returning to their offices from February to March.

Property Council Chief Executive Ken Morrison said that the reactivation of CBDs remains a major opportunity to maintain the momentum of Australia’s economic growth.

“Our CBDs are increasingly becoming reactivated, but we have more work to do before they are once again firing on all cylinders,” Mr Morrison said.

“City centres need to be driving the next stage of economic recovery as government stimulus and support measures wind down.”

“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.”

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 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,” Mr Morrison said.

“Cafes, restaurants, shops and other CBD businesses who rely on office workers being back, particularly in Melbourne, have been slower in reducing their dependence on JobKeeper payments and will be feeling the pressure over coming months.”

The Property Council has welcomed the commitment from Australia’s leading banks to bring tens of thousands of their employees back to offices to help revive activity.

“It has been encouraging to see the Federal Treasurer urging corporate leaders to consider the role their workforces can play in stimulating recovery in our CBDs,” Mr Morrison said.

“Employers who are leading by example are benefitting from face-to-face connections and collaboration as well as helping to supercharge Australia’s economic resurgence.”

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.

“Flexibility is here to stay so CBD stakeholders need to work twice as hard to motivate workers to want to be in our city centres,” Mr Morrison said. 

“Planning is well advanced in a number of cities for concerted efforts between building owners, governments and other stakeholders to encourage workers back to their offices.”

“It is critical that policymakers and employers come on the journey with industry over the coming months to boost office occupancy levels.”

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.

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%

63%

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.

The March occupancy data chartbook can be accessed here.

Media contact: Henry Pike |  M  0408 406 637 |   E hpike@propertycouncil.com.au