Workers in steady return to CBD offices, says Property Council of Australia data

Workers in Sydney and Melbourne are flocking back to their city offices after more than a year of working from home.

Almost six in 10 (59 per cent) white collar workers have returned to the Sydney CBD through April. Picture: NCA NewsWire / Damian Shaw

Workers in Sydney and Melbourne are flocking back to their city offices after enjoying more than a year of working from home, new data from the Property Council of Australia shows.

Almost six in 10 (59 per cent) white collar workers have returned to the Sydney CBD through April. It was a significant jump for the country’s largest capital, which had offices at half capacity (50 per cent) in March. Likewise, Melbourne’s CBD increased from 35 per cent to 41 per cent occupancy over April.

The other capitals maintained a stable yet higher return to work rate. Darwin and Hobart recorded the highest number of workers back (84 per cent and 82 per cent respectively). Adelaide and Perth each had 7 in 10 workers back in the office, followed by both Canberra and Brisbane on 63 per cent capacity.

Property Council chief executive Ken Morrison said that the results demonstrate welcome progress towards the reactivation of city centres.

“The benefits of bustling CBDs are significant, not just for the small businesses that rely on city foot traffic, but for the broader Australian economy,” Mr Morrison said.

“Melbourne and Sydney have been the cities hardest hit by the COVID disruption and it is encouraging to see the big number of workers returning to these CBDs in recent months.”

GPT Group chief executive Bob Johnston told the Macquarie Australia conference this week that the outlook for offices remains challenging.

He said while occupancy was not expected to deteriorate further, incentives were likely to remain elevated over the remainder of 2021 before improving into 2022.

Charter Hall chief financial officer Russell Proutt told the conference that Charter Hall was still seeing continued investor interest in offices, with the cyclical impacts of COVID-19 potentially providing an opportunity for acquisitions.

More than half of the respondents to the PCA survey identified worker preferences for greater flexibility as the main barrier to achieving full occupancy, while some voiced a hesitancy to using public transport.

“As expected, we are continuing to see isolated COVID cases having an impact on activity within CBDs,” Mr Morrison said.

“Flexibility will continue to be a major feature of working in the post-pandemic world, but there is clearly still a long way to go until our CBDs reach the levels of occupancy anticipated in the new normal.

“Melbourne still has a long way to go, and more state government leadership is needed to encourage public servants back to the office to bolster this recovery.”

The survey of office landlords, which took place between April 27 and 30, showed that a majority of office building owners and managers are not expecting to see substantial change in occupancy levels over the next three months.