OFFICE occupancy levels are on the up in Melbourne, Sydney and Perth, as most of the country saw rates sit relatively stable but it is still well below full occupancy.
In Melbourne, occupancy levels reached 35% in March, according to the latest office occupancy survey from the Property Council of Australia. This is up more than 10% from the last week in February, where 24% occupancy was reported, as the state emerged from a hard snap lockdown.
In Perth, post-lockdown office occupancy levels hit 71% in March, up from 65%. While in Sydney, the increase was smaller with a 2% increase in March to 50%. Rates also went up in Darwin from 80% to 84% and in Hobart from 65% to 71%.
In Canberra occupancy remained stable at 65%, while Brisbane recorded a marginal decline from 64% to 63% over the month. Finally, in Adelaide occupancy increased from 69% to 71%.
“Our CBDs are increasingly becoming reactivated, but we have more work to do before they are once again firing on all cylinders. City centres need to be driving the next stage of economic recovery as government stimulus and support measures wind down,” said Ken Morrison, chief executive of the Property Council.
Almost 50% of survey respondents claimed worker preferences for greater workplace flexibility is the main obstacle in returning to full occupancy.
“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,” said Morrison.
At the same time the impact of government restrictions and public transport worries are becoming less and less of an influencing factor.
“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,” added Morrison.
Morrison praised leading banks move to bring employees back into offices to jumpstart economic activity, especially within CBDs, as many hospitality and retail traders in city centres depend on this client base.
“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,” said Morrison.
According to Morrison, industries need to put in the extra effort to bring workers back to the office, through activations and attractions, which the property industry is beginning to initiate.
“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. 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,” said Morrison.
Though, according to the survey, many office building owners and managers are not yet anticipating material increases in office occupancy within the next three months.
“It is critical that policymakers and employers come on the journey with industry over the coming months to boost office occupancy levels.”
