Office occupancy in Melbourne has jumped 12 per cent in the past month, with the hard-hit Victorian capital recording its highest occupancy levels since the pandemic began.
While still at only 57 per cent, the latest occupancy data from the Property Council of Australia will come as welcome relief for the retail trade, commercial office sector and the Melbourne City Council.
It’s the first time in more than two years occupancy rates have risen above 50 per cent in the city. This time last year they languished at just 12 per cent, and in January this year dropped to 4 per cent.
Property Council chief executive Ken Morrison said the strong jump in Melbourne—the biggest increase in the country—was welcome and a very positive sign of recovery for that city.
“The Melbourne momentum has begun, with the biggest jump in office occupancy of any city in the country and a new post-pandemic high,” Morrison said.
“This is a big vibrancy boost for Melbourne and for all our CBDs where office workers are now spending more time with their colleagues in their workplaces.
“Interestingly, peak office occupancy days in Melbourne are actually the third highest in the country at 75 per cent, but its low days are the second lowest in the country at 39 per cent.”
Melbourne’s strong performance overshadowed Perth, where occupancy rates for November reached 80 per cent, which Morrison said showed the actions of political leaders could have a strong influence on city-centre vibrancy.
Office occupancy highs and lows
“While Perth didn’t experience the same severity of lockdowns as other cities, Premier McGowan sent very clear and early messages that public servants needed to remain connected to their workplaces and this has had strong results,” Morrison said.
Premier Mark McGowan was criticised earlier this year when said he believed that having people regularly working from home was not good for society, the community or CBDs.
In September McGowan denied he was opposed to flexible working arrangements.
“I’m a little bit old fashioned about people going into work,” he told reporters. “I mean police officers, construction workers, mining workers, teachers, nurses, journalists and lots of people out there go to work.
“It creates collegiality, it creates a culture that’s constructive, people work together to achieve outcomes.
“Everyone sitting in their kitchen on their laptops I don’t think generates that.”
Sydney’s office occupancy rose to 59 per cent—its highest level since June last year—while occupancy also increased in Brisbane from 64 to 67 per cent. Adelaide remained strong at 74 per cent, with Canberra dipping from 57 to 52 per cent to record the lowest occupancy levels in the country.
The PCA’s Morrison said it was pleasing to see strong occupancy in Sydney, Brisbane and Adelaide.
“It is very encouraging that Sydney’s occupancy rate has reached its highest level in a year and a half,” Morrison said.
“With warmer weather now upon us, the continuing recovery of our CBDs bodes well.”
Landlords and employers have had to get creative in their attempts to encourage workers back to the office.
And the Melbourne City Council said it had switched its focus to millennials as part of a strategy to get workers back into city offices.
“My focus is really on helping millennials understand that the learning, the experiences, the connections, the creativity and collaboration that happens in city environments is absolutely key to not just their future and their careers, but the fulfillment of their own passions and interests for what they want to pursue,” lord mayor Sally Capp told The Urban Developer in October.
