Surprising Sydney storefront fuels WFH fear
In the heart of Sydney’s bustling financial district, a surprising storefront has popped up. Here’s why office workers fear it’s the death knell for WFH.
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In the heart of one of Sydney’s major financial hubs, office workers have received a telling clue that the work from home dream is on its last legs.
As CEOs across the nation issue edicts demanding staff return to the office, Woolworths’ decision to open a Metro store in the Barangaroo precinct has raised eyebrows.
Mark Wright, the national leader of KPMG’s immigration arm, claimed the move “clearly” pointed to “more people back in the office.”
“As anyone who works in or with the supermarket corporates sector will know, Woolworths would have carefully considered their decision,” Mr Wright wrote on LinkedIn.
The senior business executive stressed it didn’t mean that “remote working is a passing trend.”
“A variety of factors are seeing a shift of talent back to the office,” he wrote, predicting that the increasing use of AI would drive young talent into the office to “build their networks”.
“As economic conditions vary employers will look for ways to boost productivity and reduce costs and this will see measures to incentivise talent back to the office,” he added.
“Top talent will assess that driving their career forward in this evolving work environment remotely will be difficult.”
His comments back up the results of KPMG’s latest survey of 1,325 Aussie CEOs.
A staggering 82 per cent, up from 66 per cent in last year’s survey, of those bosses said they expected white-collar workers would be back in the office five days a week in three years.
A majority of the business leaders also said they were rewarding employees who had ditched WFH with pay rises and promotions.
Behind Woolworths’ calculated decision
Clinton Ostwald, an urban economist with property consultants Urbis, said Woolies’ decision to open a Metro in Barangaroo, on the site of a former short lived small-format David Jones, was likely down to a combination of factors..
“The biggest factor will have been underlying demand from the office workers who have been underserved by access to a supermarket in the Barangaroo Precinct,” he told news.com.au
He said the opening of a new metro station and a pipeline of future development in the area would also have been “major considerations” by the supermarket giant.
“Woolworths undertake detailed analysis to understand the potential trade area a new store will serve, the nature of the resident and worker population,” he explained.
The economist pointed out that the spate of high-profile return to office mandates – such as the NSW Government, Amazon and Tabcorp - came after the location would have been finalised.
He did concede “the return to office trend will certainly assist retailers make future decisions to open new stores in CBD locations.”
“A growing number of people have been coming into the Sydney CBD since mid-2021, as evidenced by station entry and exit data sourced from Transport for NSW.”
Mr Ostwald predicted the trend for workers to spend more time in the office would continue and “likely settle somewhere between current levels and pre-Covid levels.”
“Ultimately as we see a new normal approaching in the next couple of years, coupled with a growing population and white collar workforce, this will lead to a renewed demand for office accommodation and more retail within CBD locations,” he said.
Woolworths said the Metro store at Barangaroo would open later this month.
“It’s in a perfect location for customers and commuters to grab something for breakfast, lots of choices for lunch,” a spokesperson told news.com.au.
“Planning for this store has been in the works for some time and we’re delighted to be creating 45 jobs once the store is open for business.”
Three towering skyscrapers
Barangaroo has emerged as a major finance hub in the last decade after the construction of the ‘International Towers’ – three striking skyscrapers overlooking Sydney’s harbour.
Tower 1, the tallest building at 217 metres with 49 floors, is home to accounting behemoth PwC, which recently renewed its lease to keep 10 floors at the building.
In a memo sent to its 26,000 UK workers last month, PwC said it would be tracking the location data of employees to make sure they were coming into the office three days a week.
Karen Lonergan, Chief People Officer at PwC Australia, said the firm had a “flexible workplace policy which does not include an onsite mandate.”
Meanwhile, Tower 2 has seen some movement in recent years – with major tenant Westpac shedding a number of floors and subletting that space to Vodafone.
Corporate law firm Gilbert + Tobin announced last year it would be leaving Tower 2 when its lease runs out in mid-2028.
Consulting firm KPMG has renewed its 14 floors in Tower 3 as the building’s anchor tenant, while Accenture is staying put in the nearby six-floor International House building.
Accenture told news.com.au it had a “hybrid approach to being in the office”, with its Aussie staff given the flexibility to work from home “as and when needed”.
Construction giant Lendlease, which has its own headquarters in Tower 3 and was the firm behind the International Towers, welcomed the news of Woolies opening up shop.
“We’re looking forward to Woolworths opening in Barangaroo in November as it promises to be a popular addition to an already thriving offering,” a spokesperson told news.com.au.
It’s understood Lendlease’s office assets in the precinct are 93 per cent leased, while retail spaces are almost entirely occupied.
Originally published as Surprising Sydney storefront fuels WFH fear
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