• Four out of five office building owners and managers don’t believe occupancy levels will rise significantly in the coming months, the Property Council of Australia says.
• In May, Melbourne’s white-collar workplace occupancy was just 45% of pre-pandemic levels, while occupancy rates were stagnant around much of the country.
• Sydney marked the only exception, with its inner-city offices now 68% full when benchmarked to pre-pandemic levels.
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Four out of five Australian office building managers don’t expect occupancy levels to rise by any significant margin in the near future, as businesses struggle to lure workers back into the nation’s central business districts.

In its latest monthly report, the Property Council of Australia (PCA) states 81% of surveyed office owners and managers believe occupancy levels will remain near-level over the coming three months.

The finding supplements the PCA’s May office occupancy statistics, which show Melbourne’s white-collar workspaces are struggling to lure business back into the CBD.

Melbourne’s inner-city offices sat just 45% full compared to pre-pandemic levels in May, the PCA states, with those figures level with April’s numbers (The survey was conducted before Melbourne entered its fourth COVID-19 lockdown on May 27).

This comes despite a joint effort from the PCA, the City of Melbourne, and the Australian Retailers Association to drive inner-city activity through ‘FOMO Friday’ activations and giveaways.

“Once the current lockdown has concluded, there will need to be a redoubling of efforts to return the Melbourne CBD into the vibrant city centre that it was prior to the pandemic,” said PCA chief executive Ken Morrison.

Sydney boasted the only city centre with an appreciable uptick, with office occupancy rising from 65% to 68% of pre-COVID levels in May.

The readings in all other capital cities remained relatively level, spanning from 71% in Brisbane, up to 93% in both Hobart and Darwin.

The PCA has long argued that boosting office occupancy will benefit inner-city businesses through increasing foot traffic and trade — to say nothing of the financial benefits of office occupancy to commercial landlords.

That perspective received a high-level cosign last Friday, when Prime Minister Scott Morrison said “it’s time to get back to the office.”

“That will be good for jobs, good for the beating heart of our cities,” the Prime Minister told reporters at the time.

While public servants nationwide flow back into the office, some workers, academics, and select businesses continue to champion the remote work initiatives sparked by last year’s lengthy office shutdowns.

“Flexibility will continue to be a strong feature of working in the post-pandemic world, but the current levels of occupancy are not sufficient to support Australia’s broader economic recovery,” PCA chief Morrison said.

But with occupancy levels largely stagnant, and low levels of optimism among office owners, the coming months may be quietly transformative for Australia’s city centres.

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