Melbourne office occupancy rate lowest in nation as post-pandemic hangover lingers

The city’s CBD office occupancy rate is the lowest in the nation and workers stay away in droves on Friday, a detailed city snapshot shows.

Melbourne has the lowest return to work rate in the nation as CBD office towers still stand largely half empty.

The city also has the greatest variance in office attendance through the work week, with Friday office attendance up to 30 per cent lower than that recorded on a Tuesday and Wednesday.

The ongoing resistance among Melbourne workers to make the trip into the city comes despite major employers stepping up their efforts to force employees back into the office.

Melbourne’s average CBD office occupancy rate stood at 56 per cent at the end of September, the latest snapshot from commercial real estate agency CBRE shows.

That is well down on every other capital city with office occupancy running at 75 per cent in Sydney and Brisbane, 85 per cent in Adelaide and 91 per cent in Perth.

Workers are least likely to come to the office on a Friday. Picture: David Crosling

Melbourne office occupancy hits a peak of 63 per cent on Tuesday and Wednesday, again well down on peak mid-weak occupancy rates of 83 per cent in Sydney, 79 per cent in Brisbane, 88 per cent in Adelaide and 94 per cent in Perth.

Melbourne’s office attendance rose 13 percentage points over the year to September, the CBRE report shows.

That was in line with the national average but well off Sydney’s recovery rate where average attendance rose from 49 per cent to 75 per cent over the year to September.

CBRE office and capital markets research head Tom Broderick said Melbourne’s slow return to office was still being influenced by it series of extended pandemic lockdowns.

“Given the extended lockdowns and a more structural adaptation of work-from-home by employees, Melbourne has the lowest average occupancy,” Mr Broderick said.

Across the nation, office attendance is highest during the middle of the work week, running at 76 per cent between Tuesday and Thursday.

That is up from 55 per cent a year earlier.

Major employers have begun to issue return to office mandates. Picture: Alex Coppel

Average and peak office occupancy rates. Source: CBRE

Workers are more willing to come in on Mondays where the national average attendance has risen from 50 per cent to 70 per cent.

But workers still don’t like Fridays, where the attendance rate stands at 60 per cent — up from 46 per cent a year earlier — the slowest recovery rate of any day.

Mr Broderick said he expected the return to the office to continue as employers take both a carrot and stick approach

Major employers such as Commonwealth Bank and National Australia Bank have issued return to work mandates this, while others such as Origin Energy and Suncorp have linked bonuses to attendance.

“The improvement in national office attendance seen over the past 12 months is likely to continue, as top management at many large corporations continue to set clearer return to office work policies,” Mr Broderick said.

Victorian Chamber of Commerce and Industry chief Paul Guerra said Melbourne CBD office workers are averaging three days a week in their workplace while other states are close to five days.

“Most businesses are working with staff to ensure the mix of days in the office are maximised to ensure the right level of collaboration and on the job training,” Mr Guerra said.

“It’s important that employees contribute to the culture of the organisation in a way that enables the organisation to achieve its economic and social goals.”