Property market update: Melbourne, April 2022
Melbourne’s growth plateaued over April and posted its first quarterly since the start of the pandemic boom, further d...
CBD occupancy will be key to maintaining the momentum of Australia’s economic growth now that government stimulus packages are being wound down, the Property Council of Australia has said.
In its latest office occupancy survey, the PCA found that the number of workers making their way back to the CBDs increased in March, with occupancy levels rising across all capital cities except Brisbane and Canberra.
The highest occupancy level was recorded in Darwin with 84 per cent, up from last month’s 80 per cent. This was followed by Hobart with 80 per cent, and Adelaide with 71 per cent, Sydney with 50 per cent and Melbourne with 35 per cent.
Brisbane CBD’s occupancy declined to 63 per cent from last month’s 64 per cent, while Canberra remained stable at 65 per cent.
According to Property Council chief executive Ken Morrison, the reactivation of CBDs remains an important factor in the continued recovery and growth of Australia’s economy following a COVID-impacted year.
“Our CBDs are increasingly becoming reactivated, but we have more work to do before they are once again firing on all cylinders.
“City centres need to be driving the next stage of economic recovery as government stimulus and support measures wind down.
“Millions of jobs and hundreds of billions of dollars in broader economic activity are reliant on a high level of activity within Australia’s CBDs,” Mr Morrison commented.
At the moment, the greater flexibility offered to workers has been identified as one of the main barriers to full CBD occupancy, along with government restrictions and public transport concerns, albeit to a lesser extent, the survey revealed.
In fact, the survey found that a growing number of office building owners and managers are not expecting to see a material increase in occupancy levels within the next three months.
According to the chief executive, while Sydney and Melbourne’s rate of office occupancy is rising, it remains short of where it needs to be to support those thousands of businesses who rely on CBD foot traffic.
“Cafes, restaurants, shops and other CBD businesses who rely on office workers being back, particularly in Melbourne, have been slower in reducing their dependence on JobKeeper payments and will be feeling the pressure over coming months,” Mr Morrison noted.
Looking ahead, the PCA has welcomed the commitment from Australia’s leading banks to bring their employees back to office-based work following the advice of the federal Treasurer, who urged corporate leaders to take part in stimulating recovery across the CBDs.
According to Mr Morrison, workers returning to the office will not only benefit from face-to-face connections and collaboration, but they will also help “supercharge Australia’s economic resurgence”.
On top of the banking industry’s commitment, the property industry has also taken initiative to attract workers back to commercial centres.
The PCA has recently introduced ‘Fab Fridays’, a campaign that will showcase the best of Melbourne through a series of free events and incentives.
“Planning is well advanced in a number of cities for concerted efforts between building owners, governments and other stakeholders to encourage workers back to their offices.
“Flexibility is here to stay, so CBD stakeholders need to work twice as hard to motivate workers to want to be in our city centres.
“It is critical that policymakers and employers come on the journey with industry over the coming months to boost office occupancy levels,” Mr Morrison concluded.