Encouraging signs: CBD office occupancy levels make a strong recovery

Encouraging signs: CBD office occupancy levels make a strong recovery

Australian CBD office occupancy is on the rise as more employees head back into the workplace, with three cities seeing rates double between February and March this year. 

According to data from the Property Council of Australia, Canberra’s office occupancy rate has risen from 21 per cent to 45 per cent – the highest percentage increase of any capital city in the nation.

Workers in Sydney, the most populous capital city, are also commuting back into the CBD with occupancy rates surging to 41 per cent in March, reflecting an increase of 23 per cent compared to the month prior.

While Melbourne recorded the lowest occupancy rate of any city (32 per cent in March), that number actually doubled from 15 per cent in the prior month. Occupancy during March also varied between peak and low days - the highest rate reaching 38 per cent and falling as low as 17 per cent.

Adelaide – which holds the highest office occupancy rate at 61 per cent - saw a modest increase of 14 per cent in March. It is also one of the only cities just shy of reaching occupancy rates from the same time last year (69 per cent) alongside Melbourne (39 per cent).

The only capital that reported a downturn is Perth, which dropped to 45 per cent occupancy – the lowest rate since July 2020 - as WA entered its peak Omicron infection period.

While the big gains in many cities were coming off Omicron-induced lows, Property Council of Australia chief executive Ken Morrison said the data was encouraging.

“It's heartening that people are returning to the office in such numbers, particularly given considerable weather events on the east coast and the continuing isolation impacts of the pandemic," Morrison said.

“To see office occupancy rates double in some of our major CBDs is especially pleasing and bodes well for further recovery in the months ahead.

“While most businesses are encouraging some flexible working arrangements with their staff, there are huge benefits in personal connection and it’s good to see these being embraced once again.”

Brisbane saw occupancy rates creep up by 7 per cent between March and February to 48 per cent - a considerable increase since levels plummeted to 13 per cent in January.

Queensland Executive Director of the Property Council Jen William said the results were testament to the resilience of Brisbane’s workplaces and businesses, the majority of which were back up and running within hours of the floodwaters receding.

“It hasn’t been the start to 2022 we envisioned for the city centre, but key learnings from 2011 ensured a quick bounce back for many operators, and confidence is again building,” she said.

“That being said, the recent flood and its flow-on impact on public transport networks inhibited access to the city for many people, which is apparent in this latest survey.

“Fortunately, despite all these factors, office occupancy continues to trend in the right direction and Brisbane is leading the race back to the office among major cities.”

The data also found the majority of property owners (56 per cent) expected to see a major improvement in occupancy levels within the next three months or more, while 32 per cent hoped to see an uptick within the next one to two months.

With the exception of Perth, all cities have seen more employees return to the office since the start of the year – where occupancy rates plummeted to low as 4 per cent in Melbourne and 7 per cent in Sydney and Canberra during the peak of the Omicron outbreak.

“As forecasted, office occupancy rates accelerated in March as more businesses reopened after the school holidays,” Morrison said.

“We hope to see this trend continue as the Property Council works with business and all levels of government to bring back vibrancy into our CBDs.”

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