- Office occupancy rates recovering in most states, doubling in Melbourne, Sydney and Canberra
- Sydney rate risen by almost six times since January, despite floods and Omicron outbreaks
- 32% of office owners forecast major recovery in rates within next two months
New research indicates office occupancy levels are beginning to recover in most major cities, more than doubling over March for Melbourne, Sydney and Canberra.
The March Office Occupancy survey commissioned by the Property Council of Australia found Melbourne’s rates jumped from 15% to 32%, while Sydney and Canberra saw increases from 18% to 41%, and 21% to 45% respectively.
Occupancy rates in Brisbane and Adelaide rose more moderately, increasing from 41% to 48%, and 47% to 61% respectively.
In Perth however, office occupancy dropped to its lowest rate since July 2020 with a fall from 55% to 45%, a sign of the times in the state reaching its peak Omicron infection rates.
Overall level of occupancy in office buildings as a percentage of pre-COVID rate
Sydney up 34% from January
Sydney’s rapidly rising office occupancy is an encouraging sign for the city once plagued by astonishingly low rates.
Property Council’s NSW Executive Director Luke Achterstraat said the 41% occupancy rate is proof that Sydney is well on the road to recovery, after recording 7% and 18% occupancy in January and February.
“Even with the terrible floods and lingering Omicron waves that persist to have isolation
impacts, it is encouraging to see such strong numbers continuing their positive trajectory,” Mr Achterstraat said.
“To see the rates rise almost by six times since the start of the year is very pleasing and
reminds us all that we are on the road for recovery.”
He acknowledged the efforts of many businesses in embracing flexible working arrangements, but emphasised the benefits of personal connection that comes with working in an office space.
Optimistic outlook for future recovery
Though the recovery of office occupancy levels across most states comes off the back of Omicron outbreaks, Property Council of Australia Chief Executive Ken Morrison said the data was very encouraging.
“It’s heartening that people are returning to the office in such numbers, particularly given considerable weather events on the east coast and the continuing isolation impacts of the pandemic,” Mr Morrison said.
“To see office occupancy rates double in some of our major CBDs is especially pleasing and bodes well for further recovery in the months ahead.”
Ken Morrison, PCA Chief Executive
As expected, the survey also indicated daily fluctuations in office occupancy throughout March.
In Adelaide, the occupancy rate reached 72% on a peak day and fell to 49% on a low day. In comparison, Sydney peaked at 52% and reached its lowest at 23%.
Peak and low day levels of occupancy in office buildings
The survey also found 32% of respondents believed there would be a major improvement in occupancy levels within the next two months, while more than half were less optimistic believing it would take three months or more.
Meanwhile, just under half (42%) of office owners indicated that they believe a preference for greater flexibility is driving the shift in occupancy levels.
Seasonality may also be at play, as Mr Morrison noted the acceleration in March occupancy rates coincided with business reopening after the school holidays.
“We hope to see this trend continue as the Property Council works with business and all
levels of government to bring back vibrancy into our CBDs,” he concluded.