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As per CBRE’s latest report, office occupancy rose to 76% of pre-Covid levels in Q1 2024
May 16, 2024 | Staff Reporter | Australia | Property Management
CBRE’s latest research has found that all office markets across Australia saw rising occupancies in Q1 2024; this excludes the traditionally quieter holiday periods of December and January. Across the nation, office occupancy rose to 76% of pre-Covid levels in Q1 2024. It represents a six percentage point rise from the final quarter of 2023, where occupancy was recorded at 70%, and a nine percentage point rise from a year ago.
This starkly contrasts the American office attendance rate, which has stabilised at around 50% of pre-pandemic levels on average over the past year. “Australia’s capital cities have the benefit of better access to public transport, shorter commute times, and lower inner-city crime rates,” said CBRE’s Australian Head of Research, Tom Broderick. He further added that Australia is expected to see continuing improvement across this year, and beyond. In particular, Broderick is expecting to see improvements in office attendance on non-peak days.
The Western capital of Perth recorded a 93% occupancy, while the city of churches Adelaide recorded an 88% occupancy. “These markets have shorter commute times for employees and working from home has been less structural in these cities,” said Broderick. “Peak days in Perth and Adelaide are almost back to pre-COVID norms at 96% and 94% respectively and there is also less discrepancy between attendance on different days of the way compared to the larger cities of Sydney and Melbourne.”
The report also noted that a slower return to the office for public sector tenants in Brisbane, which comprises some 35% of the occupier market, has weighed on the Queensland capital’s overall results. Melbourne saw heartening results as one of the most improved cities: up from 57% to 62% occupancy quarter on quarter while in Sydney, major banks and professional services firms are driving occupancy.
Employers are making substantial investments into their in-person offerings, with offices now looking swankier and providing a lot more amenity to those who are WFO. “Businesses are continuing to incentivise workers to encourage this return to office theme and are also investing in higher quality accommodation to earn the commute,” said Broderick.
Businesses are continuing to incentivise workers to encourage this return to office theme and are also investing in higher quality accommodation to earn the commute.
Tom Broderick, CBRE’s Australian Head of Research
CBRE’s Pacific head of investor leasing, Tim Courtnall has observed a correlation between upgrades made to offices and the rise in employees in the office. “Just over two-thirds of the businesses that have moved premises in the past three years have upgraded to a better-quality office building,” said Courtnall. “Feedback from some of these occupiers suggests a significant improvement in employees returning to the office following a move to new generation office stock.”
Obversely, Courtnall observed another strong incentive for employees to return to the office. “Some organisations are also starting to link pay and promotions to office attendance, linking this to enhanced corporate culture and the contributions this makes to the mentoring of younger employees.”
Even the tech sector, which is famed for embracing flexible working, is trying to shift team members back into the office, particularly as in-person and frequent collaboration and interaction drives innovation.
