Home Office Workers are returning to Australian offices

Workers are returning to Australian offices

  • May 15, 2024
  • by Property Australia
Australia’s CBD office occupancy rate averaged 76% of pre-COVID levels in Q1 2024

Workers are heading back to the office in growing numbers, with Perth and Adelaid leading the pack. 

New data from CBRE for the first quarter of the year, excluding the quieter December and January months, shows Australia’s CBD office occupancy rate averaged 76 per cent of pre-COVID levels in Q1 2024, up from 70 per cent in Q4, 2023 and 67 per cent a year ago.

CBRE’s Australian Head of Office Research Tom Broderick said the improved trend was in stark contrast to the US, where office attendance had stabilised at about 50 per cent of pre-COVID levels.

“Australia’s capital cities have the benefit of better access to public transport, shorter commute times and lower inner-city crime rates,” Mr Broderick said.

“CBRE Research expects occupancy levels in Australia will continue to rise over the remainder of 2024 and beyond, particularly on non-peak days. Businesses are continuing to incentivise workers to encourage this return to office theme and are also investing in higher quality accommodation to earn the commute.”

Australian Office Occupancy by CBD Market in Q1 2024 (compared to pre-COVID levels)

CBRE’s Pacific Head of Investor Leasing Tim Courtnall said enticing work environments were a key drawcard, which had been demonstrated through CBRE’s relocation data.

“Just over two-thirds of the businesses that have moved premises in the past three years have upgraded to a better-quality office building. Feedback from some of these occupiers suggests a significant improvement in employees returning to the office following a move to new generation office stock,” Mr Courtnall noted.

“Some organisations are also starting to link pay and promotions to office attendance, linking this to enhanced corporate culture and the contributions this makes to the mentoring of younger employees.”

Occupancy rates improved in all CBD markets between Q4 2023 and Q1 2024. Melbourne rose five per cent over the quarter. Its average weekly occupancy continues to be impacted by low levels of attendance on Mondays and Fridays, which is 20 percentage points lower than the mid-week average of 71 per cent.

However, the smaller cities of Perth and Adelaide have the strongest occupancy rates at 93 per cent and 88 per cent respectively.

“These markets have shorter commute times for employees and working from home has been less structural in these cities. Peak days in Perth and Adelaide are almost back to pre-COVID norms at 96 per cent and 94 per cent respectively and there is also less discrepancy between attendance on different days of the way compared to the larger cities of Sydney and Melbourne,” Mr Broderick said.