Already new data is showing that occupancy rates are on an upward trajectory,the first time since the start of the global pandemic. The most recent bout of unseasonable hot weather in Sydney saw more people come back to the cooler office towers.
More workers are tipped to come back to the office to escape the summer heat.Supplied
CBRE’s latestAustralia CBD Office Occupancy Briefshow that most CBD offices are in a strong leasing position with elevated city vacancy rates being driven by a few assets.
As at the end of June when the data was collected,62 per cent of Australian CBD office properties had occupancy rates of greater than 90 per cent,while 15 per cent of properties in the capital cities had occupancy rates between 80 per cent and 90 per cent.
This study was completed by looking at the amount of vacant space in each CBD office building included in the PCA office market report released in July. It looks at office market conditions as of July 2023 compared to conditions in July 2019.
CBRE research manager Thomas Biglands predicts that while overall vacancy rates may increase marginally over the near term,well-situated and high-quality office properties will maintain elevated occupancy rates over this time.
The Bureau of Meteorology has officially declared Australia is in an El Nino weather event.
“We forecast that the CBD vacancy rate will peak at 13.5 per cent in 2024 due to the final recovery in return-to-work rates in the larger markets and the elevated levels of new supply expected to be delivered over the next year,” Biglands said.
“Following this peak,we expect that vacancy rates will recover gradually as construction slows and leasing demand accelerates.”
On a state basis,Canberra led the charge with the highest occupancy at 66 per cent,followed by Sydney at 65 per cent,Adelaide at 64 per cent,Brisbane at 62 per cent,Melbourne at 61 per cent and Perth at 54 per cent.
Mark Curtain,CBRE senior managing director,advisory and transaction services,said the COVID-19 lockdown period forced occupiers to rethink their office requirements,which led to adoption of the hybrid working models causing a rise in vacancy rates.
“Despite these shifts,office market conditions in Australia are reversing course and showing real signs of improvement,” Curtain said.
“We are coming out of this period in a much stronger position than general sentiment would suggest.”
Vanessa Rader,head of research at Ray White,said instead of imposing four-day working week mandates,just make it law,which,she adds has proven successful overseas.
“A four-day week is not as crazy as it sounds – the UK did a trial last year across 61 businesses,reducing working hours to four days per week,but maintained productivity and paid staff a five-day wage,” Rader said.
“The findings saw 92 per cent of businesses call it a success,and many have implemented the permanent change due to their staff being happier and performing better at work.”
She said the mandating of staff back into the workplace for a four-day week would do much to stimulate the office market’s demand for space,while promoting better work/life balance,reduced stress and growth in health benefits.
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