Allan government urged to show active leadership as Melbourne CBD office vacancy rates soar

The state government is being urged to show “active leadership” as Melbourne CBD office vacancy rates remain the highest in the nation, prompting pleas for public servants to ditch working from home.

The Allan government is being urged to start showing more “active leadership” as Melbourne CBD office vacancy rates remain the highest in the nation and demand falls to its lowest level in three years, prompting pleas from city restaurateurs.

The alarming new data, which will be released on Thursday, shows office vacancy levels have remained stuck at 18 per cent more than six months – the highest of any state and up from 16.6 per cent in January last year.

The figure, revealed in the Property Council of Australia’s (PCA) biannual Office Market Report, is 4.3 per cent above the national average.

In the six months to January, Melbourne also recorded its lowest level of demand since 2022 – and the fifth consecutive period of negative demand for office space.

Melbourne’s CBD office vacancy rates are the highest in the nation. Picture: Mark Stewart

The dire figures have prompted urgent calls from PCA Victorian executive director Cath Evans for the Allan government to start showing “more active leadership” and cracking down on Victorian public servants working in the office more often.

“If we want to remain one of the best cities to visit in the world, we must champion a thriving CBD that supports the businesses that help make our city great,” she said.

“The thousands of small businesses that call our CBD home are struggling without the regular foot traffic of office workers to support them.”

Manager of CBD restaurant Claypot Barbarossa, Nurul Waselan, said the slow return of CBD workers was “affecting us big time”.

“Before Covid, Fridays used to be busy,” they said.

“We’re not getting the office people, we’re missing them.”

One trader said the city can feel like “a ghost town”. Picture: Ian Currie

Owner of the Mill restaurant and Charlie’s Bar, David James, said it wasn’t just the vacancy rates but the “low occupancy rates within places that are occupied”.

“You have one day when you’re doing 30 or 40 people for lunch, the next day you’re doing three,” he said.

“Fridays can always be the quietest day of the week these days, before Covid it was huge.”

Queensmith wine bar owner Gerard Kelly agreed, saying some days “it feels like a ghost town”.

“Mondays are really quiet, then all of a sudden you have a really busy Monday … something needs to change to get the city going again on a more consistent basis,” he said.

Ms Evans said there remained a “significant body of work” to be done by the state government, alongside industry.

The state government has been contacted for comment.

Originally published as Allan government urged to show active leadership as Melbourne CBD office vacancy rates soar