Why more workers are expected to return to the Sydney CBD

In January, CBD worker numbers were at just seven per cent of pre-Covid levels. But by Christmas the city could be at 70 per cent of the old normal. Here’s why.

There’s growing confidence CBD employee numbers will surge to 70 per cent of pre-pandemic levels by the year’s end, with major businesses such as Westpac telling staff to come back to the city as Covid case numbers ease.

The prediction comes as more and more employers move to better offices to not only encourage their existing workforce to return to commuting but to lure new hires amid a labour shortage and resulting “war for talent”.

Property Council of Australia’s NSW executive director Luke Achterstraat said office occupancy grew from just seven per cent in January to 55 per cent in June, before declining slightly in July as big employers including Westpac and Telstra urged teams to stay home, and other workers gave up on coming in after rail chaos.

“Having no trains is not ideal,” Mr Achterstraat told The Daily Telegraph.

Still, it was “absolutely realistic” that 70 per cent occupancy would be reached by Christmas. Already, on some days of the week, workplaces were two-thirds full, he said.

The offices of KPMG, Westpac and HSBC at International Towers at Barangaroo. Picture: Justin Lloyd

“I think there is more upward momentum to come, particularly as we are through the worst of winter now.”

To encourage employees to return — and to attract new staff amid a labour shortage — many businesses were moving to better offices, Mr Achterstraat said.

“In the war for talent, if employers are going to win, they need to have really enticing places to work,” he said.

Office leasing agency Cadigal’s director Mark Tindale said an increasing number of employers were set on “earning the commute”.

“Many staff have become very comfortable in working from home, and the number one dislike with working from the office is having to commute,” Mr Tindale said.

“In our view, the better the quality of the office location, building grade, amenity and fit-out — the more effective that the workplace is in helping the business to attract and retain quality staff.

“The premium and A-grade buildings, especially those in the core CBD area are outperforming the B and C grade buildings in terms of tenant demand for space,” Mr Tindale added.

Westpac occupies the middle tower at Barangaroo and a large office building on Kent St, Sydney. Picture: Justin Lloyd

This is confirmed by recent research from Jones Lang LaSalle which found that since the start of 2021, Sydney CBD prime grade real estate “net absorption” had increased by nearly 100,000 square metres, while the amount of secondary-tier assets under lease had gone backward by more than 75,000 sqm.

The Property Council’s Mr Achterstraat said the state government and Premier Dominic Perrottet had a key role to play in bringing more life to the Sydney CBD.

He said this role included making sure an earlier directive to department heads to get staff back into city offices was “taken seriously”.

On Thursday, thousands of Westpac workers were told to come in to its Barangaroo and Kent St locations from next week.

In an email, Westpac’s human resources chief Christine Parker said “we’re ready to return to ‘green’ workplace settings” from August 15.

“As part of this return to ‘green’ workplace settings, we’ll be asking you to come into the office on your team’s allocated days,” she wrote.

Daily Covid case numbers for Australia as a whole began rising in June and hit a peak of more than 55,000 on July 21. But this week, the daily numbers have been about half that level.

In the days prior to last month’s peak, Westpac told staff it was relaxing requirements to come to the office as part of a move from ‘green’ to ‘amber’.

It’s understood most staff are expected to come in either two or three days a week.