New restrictions and greater worker flexibility pose the greatest challenges to reviving the CBDs. Source: Canva.
  • PCA office occupancy survey show mixed results
  • Covid restrictions pose an ongoing challenge to the revival of CBDs
  • Worker preference for greater flexibility is a primary barrier

Although the Australian economy is making a seemingly steady recovery, on and off Covid restrictions are posing a challenge to the healthy comeback of CBDs, according to the Property Council of Australia’s (PCA) latest office occupancy survey.

Based on figures from PCA members who manage or own CBD buildings (covering occupancy for the period from 21-23 June 2021), the survey revealed capital CBDs recorded markedly different results – with activity fluctuating between weekly peaks and troughs. In fact, the office occupancy on the quietest day of the week was only 58% of the occupancy achieved on the busiest day.

Peak and low day level of occupancy in office buildings

Source: Property Council of Australia.

“The numbers reveal that the levels of office occupancy fluctuate significantly on different days of the week,” said Property Council Group Executive of Policy and Advocacy, Mike Zorbas.

Although it is clear that recent health restrictions and lockdowns are posing a barrier to the revival of CBDs, respondents identified greater flexibility as the primary barrier to achieving consistent occupancy.

“While a number of Australian cities are now facing fresh restrictions, the underlying worker preference for a flexible working week will continue to pose a challenge to the desired level of CBD recovery on the other side of lockdowns.”

Mike Zorbas, Property Council Group Executive of Policy and Advocacy

The survey found that 80% of office building owners and managers are not expecting to see a material increase in occupancy levels within the next three months.

Looking at our largest capital cities in the nation, Sydney shakily performed due to new Covid cases and a mask mandate introduced in offices for the first time. Meanwhile, Melbourne’s occupancy figures showed a reduction from 45% to 26% between May and June due to lockdowns – and the PCA also anticipate Sydney occupancy to be affected for the same reason.

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

Source: Property Council of Australia.

Mr Zorbas said that the property industry is continuing to take the initiative to entice workers back to Australia’s commercial centres through a coordinated program of activations and attractions.

In Melbourne, the Property Council’s FOMO Fridays was held conjunction with the City of Melbourne and the Australian Retailers Association.

In Brisbane, the Fridays in the City initiative recently wrapped up reactivation efforts in partnership with Brisbane City Council, the Queensland Government and other CBD stakeholders. PCA estimated a 12.5% increase in foot traffic as a result.

In Adelaide, FOMO Fridays will be pitching freebies to try get South Australians back to the city.

In Sydney, the other side of lockdown will see $100 of Friday-only vouchers to 500,000 office workers and an NYE party on the Cahill Expressway.

“Building owners and managers are not waiting for government leadership to drive CBD reactivation, we are proactively making the case for workers to return to their offices and enjoy all the benefits of face-to-face teamwork.”

Mike Zorbas, Property Council Group Executive of Policy and Advocacy

PCA, supported by a range of industry groups, has called on the government to form of a CBD activation task force as part of its CBD activation priorities.

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