Office Occupancy Rising In Nearly All Aussie CBDs
AUSTRALIA – The Property Council of Australia’s latest survey on commercial landlords showed that office occupancy rates in nearly all central business districts (CBDs) across the country improved last month, reported the Australian Financial Review (AFR) on Tuesday morning (9 February, SGT).
For instance, office occupancy level in Melbourne surged to 31 percent by the end of January compared to just 13 percent in December. However, this is below the 50 percent workplace capacity allowed in the state of Victoria since 18 January compared to 25 percent previously.
The industry body’s poll was conducted from 27 January to 4 February.
In Sydney, the occupancy rate remained at 45 percent during the period under review after reaching 40 percent last October, as the return-to-work drive was hindered by the recent imposition of a 3-week lockdown at the Northern Beaches due to a virus outbreak.
Before the health crisis occurred, the occupancy level of office buildings in Melbourne and Sydney stood at 94 percent.
Meanwhile, the occupancy rate at other capital city CBDs, including Canberra and Adelaide, ranged from 60 percent to 70 percent at the end of January.
On the other hand, Perth was the only office market where the occupancy level declined, from 77 percent in December to 66 percent during the stated period because of a 5-day lockdown imposed to prevent a new virus outbreak.
The Property Council’s CEO Ken Morrison said the findings of the survey is good news for the office rental market and for the economy at large, but more progress is needed.
“As we start the new year it is encouraging to see so many CBD workers coming back to their offices to enjoy the benefits of face-to-face connections and collaboration. While we have a long way to go to get back to pre-COVID levels, increased CBD occupancy is a godsend for the thousands of businesses that rely on bustling city centres to survive.”
“Our CBDs support millions of jobs and generate hundreds of billions of dollars in economic activity,” he emphasized.
Notably, the above occupancy rates pertain to occupied space, not actual leased office space, as data from the industry body revealed that Sydney’s actual vacancy rate reached 8.6 percent at the end of January, while that in Melbourne rose to 8.2 percent.
Commenting on the survey results, Investa shared that occupancy across its portfolio was “slowing improving”.
“The Property Council data shows that office occupancy is improving on the back of an easing in COVID-related barriers, such as government restrictions and concerns about the health and safety of public transport,” said David Cannington, general manager of research & strategy at Investa, one of Australia’s largest office landlords.
“All office markets are also reflecting a trend increase in occupancy in recent months as sentiment continues to support a ‘return to office’ and a greater appreciation for the benefits of office-based work,” added Cannington.