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Despite the obvious impact the COVID-19 pandemic has had on CBDs, a researcher has labelled the forecasted death of CBDs an over-exaggeration, tipping a return is on the cards in the near future.
As workers swapped their CBD commute to work from their kitchen tables or their home offices in March last year, occupancy levels across CBD’s nosedived. Melbourne’s CBD hit as low as 4 per cent of its pre-COVID occupancy levels, while Sydney performed slightly better, hitting 40 per cent.
But despite these buckling trends, latest report has suggested that the “CBD isn’t dying – it’s just changing form”.
According to the multinational professional service firm’s research, a new wave of businesses are increasingly entering the CBDs, with the potential to create communities that revitalise the city, sparking new collaborations and fresh energy.
“This injection of innovation and entrepreneurship is poised to set the stage for future growth,” PwC said in its Changing Places: how hybrid working is reinventing the Australian CBD.
PwC tipped that given a large percentage of the workforce are embracing flexible working, major CBD tenants can be expected to reduce their floorspace, ultimately increasing the availability of subleases and opening the door to start-ups and small businesses.
As of December 2020, the sublease availability in Sydney is 170,300 sq m. That frees up space for around 14,000 new workers to come into the CBD, equivalent to around 430 dynamic SMBs, replacing departed workers and reinvigorating the city.
“This could set the stage for a new wave of CBD innovation. Entrepreneurs could take up residence in co-working spaces and social enterprises and creative professionals who have previously worked out of lounge rooms and bedrooms could establish offices in disused buildings and corporate foyers,” PwC said.
“We see this paving the way for robust start-up ecosystems and sowing the seeds for new communities that imagine progressive ways of working and living.”
These “fresh arrivals” are expected to revitalise urban centres, attracting new ventures from fields such as recreation and leisure, culture and hospitality. Overseas investments and global talent are also tipped to show increasing interest in Australia’s new CBDs, giving rise to opportunities for growth that have never existed before.
“We may look back at the COVID-19 era as one that adversely impacted the owners of CBD properties. But we can also see this as the dawn of a new era in which the CBD is re-imagining itself and creating exciting opportunities for innovation, collaboration and progress that haven’t existed before.
“We believe that Australian CBDs will continue their defining role as economic powerhouses – as well as incubators for the changes that are still to come,” PwC concluded.