East Coast offices will sit empty for months
Offices on the east coast, hit by the lockdown, will remain almost empty until the end of the year, with occupancy rates as low as 4% in Sydney, according to the Property Council of Australia’s latest monthly survey of building owners and managers.
The two largest capitals and Canberra have been hit hardest by the pandemic and while Sydney’s 4% occupancy rate – a proportion of its presumed pre-COVID-19 rate of 90% – stagnated for the month last and Canberra held steady at 8 percent, Melbourne dropped from 7 percent to 6 percent.
Even as immunization levels rise, the numbers show the challenge for homeowners and policy makers to recover from the delta variant of COVID-19. More than three-quarters of those polled said they did not expect a significant increase in the occupancy rate of the CBD offices in the next three months.
A high level of cooperation between owners and employers to prepare offices for staff was also crucial, said Property Council chief executive Ken Morrison.
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“The thriving CBD is not an optional supplement, we need to reactivate our malls properly if Australia is to replicate the strong economic recovery we experienced after last year’s shutdowns,” said Mr Morrison.
“It’s not just cafes, dry cleaners and restaurants, activity in our CBDs supports millions of jobs and generates hundreds of billions of dollars in broader economic activity.”
Occupancy declined elsewhere in September. Brisbane’s average fell to 51% from 60% in August. Adelaide, which fell to 15% in July (after reaching 80% in June), rose to 64% from 65% in August.
Perth and Hobart were little changed, while Darwin’s occupancy rate fell from 82% to 89%.
The owners take the challenge seriously. Brookfield Asset Management’s managing director for real estate, Sophie Fallman, said last week that the Australian arm of the global office owner is planning individual reactivation plans for the buildings, acknowledging that they are all different.
“But overall, they will focus on shifting our marketing budget to primarily support our retailers for the benefit of our occupants,” Ms. Fallman said.
Attracting people with food was going to be a key strategy, she said.
“We will work with our tenants to provide people with free coffees, hot donuts and beautiful bouquets of flowers when they walk through the front door, to activate and remind people how good it is to be. return – as soon as it is safe to do so and in accordance with government restrictions, ”Ms. Fallman said.
But even with high immunization levels, getting people used to returning to the office wouldn’t necessarily be a “linear” experience, and landlords and tenants would likely have to experiment with different strategies, she said.
“We should all expect it to be probably a little lumpy and a little choppy,” she added.
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