- Lockdowns are at the root of slashed office occupancy levels
- Melbourne, Sydney and Canberra CBDs hit hardest
- Recovery predicted to be slow
The impacts of Covid restrictions on CBDs are expected to outlive lockdowns, as office occupancy rates reach record lows in Australia’s largest cities.
But the Property Council of Australia believes CBD reactivation will be critical for Australia’s recovery.
The Property Council’s office occupancy September survey revealed that Sydney’s CBD remains at only 4% of pre-Covid levels as the city prepares to ease restriction.
Respondents to the server were office building owners and managers.
NSW Property Council Executive Director Luke Achterstraat believes that it is time for the reactivation of the CBDs.
“The lockdowns are fortunately coming to an end and we look forward to healing the wounds from more than 100 days of lockdown”, Mr Achterstraat said.
“We have to get our recovery right.”
Luke Achterstraat, NSW Property Council Executive Director
“Relaunching our CBDs requires a concentrated effort from all levels of government working together with business owners and employers to ensure we bounce back to pre-pandemic levels.”
A similar effect of lockdowns is being felt in Melbourne which recorded only 6% pre-Covid occupancy. Canberra is at 8% of pre-Covid levels.
Property Council Chief Executive, Ken Morrison, explains the coming months of reopending will be a key to recovery.
“With Sydney and Melbourne both committed to a path out of lockdown, CBD office owners and managers are working to prepare their assets for the return of vaccinated workers,” Mr Morrison said.
“Thriving CBDs aren’t an optional extra.”
“We need to have our commercial centres reactivated properly if Australia is to replicate the strong economic recovery that we experienced following last year’s lockdowns.”
“This isn’t just about the coffee shops, dry cleaners and restaurants,”
Ken Morrison, Property Council Chief Executive
“The activity in our CBDs support millions of jobs and generate hundreds of billions of dollars broader economic activity,” Mr Morison continues
Slow and Steady
80% of respondents to the Property Council survey are not expecting office occupancy rates to rise by a significant rate before the year’s end.
This sentiment is confirmed by Mr Achterstraat who said the recovery would take time.
Following the 2020 lockdown, occupancy rates in Sydney only peaked at 68% of pre-Covid levels. This peak was reached in May 2021.
“We understand the renewal won’t happen overnight,”
Luke Achterstraat, NSW Property Council Executive Director
“Between now and Christmas, our collective role is to show leadership in the return to office and build confidence in the return to CBD, through investment initiatives such as the Cahill Expressway highline activity, and the [NSW] State Government $50m investment in Friday CBD dining vouchers.
“Through knowing that restrictions are on their way out, we can expect a sharp rise in office occupancy levels and overall CBD market confidence.”
Other research has suggested that the ‘work from home’ trend is likely to persist beyond the pandemic which may mean the CBD occupancy level are unlikely to recover to pre-pandemic levels in the near future.
