Incentives needed to entice workers back to CBDs: Property Council

The number of white collar workers returning to CBD offices has stalled in all capital cities as workplaces embrace flexible arrangements.

Workers in Sydney’s Martin Place last month. Sydney’s office occupancy climbed 3 percentage points to 68 per cent but still sat behind the smaller capitals. Picture: NCA NewsWire/Gaye Gerard

The number of white collar workers returning to CBD offices has stalled in all capital cities as workplaces embrace flexible arrangements.

The Property Council of Australia is concerned local powers will need to implement greater city revitalisation measures in order to encourage office workers back after the updated May office occupancy survey showed minimal change in the number of commuters.

The low levels of activity are a concern for businesses operating in the CBD area, said Property Council chief executive Ken Morrison.

“Flexibility will continue to be a strong feature of working in the post-pandemic world, but the current levels of occupancy are not sufficient to support Australia’s broader economic recovery,” Mr Morrison said.

“Our CBDs support millions of jobs and generate hundreds of billions of dollars in economic activity. We need them firing on all cylinders.”

Sydney’s office occupancy climbed 3 percentage points to 68 per cent but still sat behind the smaller capitals. Brisbane and Canberra each grew one percentage point to 71 per cent, Perth fell one point to 77 per cent and Adelaide held steady to 78 per cent. Hobart has the highest level of return in the country, climbing 2 points to 93 per cent month-on-month.

Melbourne had the lowest occupancy rate in the country, recording a return of just 45 per cent of workers for the second consecutive month. The May survey was conducted ahead of the city re-entering lockdown two weeks ago.

Mr Morrison said he is concerned of the impact of the latest Covid-19 concerns on worker morale, noting there will need to be a concerted “redoubling of efforts” to reinvigorate the city Melbourne CBD.

“Even before the current lockdown, it was clear that Melbourne was well behind the pack in terms of CBD recovery,” Mr Morrison said.

“Once the current lockdown has concluded, there will need to be a redoubling of efforts to return the Melbourne CBD into the vibrant city centre that it was prior to the pandemic.”

Prime Minister Scott Morrison’s message to government and private sector employers that it is “time to get back to the office”,” and national cabinet’s subsequent referral of current office physical distancing guidance to the Australian Health Protection Principal Committee for review was welcomed by the property lobby group.

“Governments have a key leadership role to play by ensuring that their own workforces are turning up to the office, getting the full benefits of in-person collaboration, and contributing to the city economy,” said the Property Council chief.

The methodology behind the data was updates since the last collection and now reflects the percentage of the pre-Covid office occupancy (estimated at 90 per cent) as opposed to a percentage of overall office space.