CBD office occupancy rates surge higher as workers return

Office workers are getting used to life back in the CBD as occupancy rates continue to rise across the country.

 

The Property Council of Australia’s latest Office Occupancy survey found large numbers of office workers headed back to Adelaide’s CBD in May, with the occupancy rates jumping from 59 to 71 per cent.

 

Across the Canberra CBD, occupancy rates surged from 39 per cent to 60 per cent, while levels in Perth and Brisbane rose 13 per cent, to 63 and 64 per cent respectively.

 

In Sydney, occupancy rates climbed from 42 per cent in April to 55 per cent in May. In Melbourne, rates rose from 36 per cent to 48 per cent.

 

The recovery has been dramatic since 2021 when Sydney’s office occupancy rate fell to 4 per cent in August, while Melbourne’s also plunged to 4 per cent in October on the back of ongoing lockdowns.

 

Property Council Chief Executive Officer Ken Morrison said it was pleasing to see occupancy levels bounce back across the country.

 

“What we’ve seen this month is a consistent and sizeable lift in the numbers of people returning to the office across all CBDs,” Mr Morrison said.

 

“More individuals and workplaces are embracing the benefits of face-to-face connection and CBDs are regaining much of their vibrancy.

 

“This positive lift has occurred at a time when Covid and now the flu are circulating widely, forcing many people and families to stay home or isolate, on top of some extremely wet weather on the east coast.

 

“Despite the challenging environment, it’s very pleasing to see plenty of people returning to their workplaces, with occupancy on peak days reaching 80 per cent in Adelaide, 73 per cent in Brisbane and 66 per cent in Sydney,” he said.

 

Mr Morrison said he expected the trend of workers returning to the office to continue.

 

“While flexible working is here to stay, there is a value in face-to-face connection that can’t be replicated over a screen,” he said.

 

“Our latest Office Market Report shows that this jump in occupancy is matched by strong demand for office space from tenants, despite the impacts of the pandemic.

 

“Strongly growing white collar employment also paints a positive picture for the future of our CBDs.”

 

The latest office occupancy survey found the preference for greater flexibility, including working from home, was the major driver of occupancy levels, and more than 50 per cent of respondents believed it would take three months or more for occupancy levels to materially increase.

 

“Many businesses and building owners are embracing change and evolving the role of the workplace for their teams,” Mr Morrison said.

 

“It is clear is that CBDs will continue have a very strong role to play in a post-Covid world, even as businesses and their employees evolve to new ways of working.”