Slow bounce back from lockdown as office return falls

By Brendan Rees

Office occupancy in Melbourne’s CBD plunged to 26 per cent of pre-COVID levels in June as the city endured its fourth lockdown, new Property Council data has shown.

According to the council’s findings, occupancy rates had risen to 45 per cent in April and May, but took a sudden hit after stay-at-home restrictions were ordered for two weeks in late May.

The fourth lockdown meant Melbourne’s occupancy fell 41 per cent behind Sydney in June.

Hobart led the way in June with 89 per cent of office workers back, followed by Darwin (88 per cent), and Adelaide (80 per cent).

The survey also found that 80 per cent of office building owners and managers had not expected to see a material increase in occupancy levels within the next three months.

Under the current restrictions (as at July 2), workplaces like offices can increase to 75 per cent capacity or 30 people, whichever is greater.

At a June 29 council meeting, City of Melbourne Lord Mayor Sally Capp said it had been “working tirelessly to help businesses and workers bounce back”, after conceding the city had been “hit hard” by lockdowns and restrictions.

“Elements such as hospitality, retail, culture, and entertainment are key to bringing our workers back to the city – they are intertwined in a way that makes our city absolutely distinctive,” she said.

“International evidence is absolutely clear that strong, vibrant shopping centres are key to economic recovery following COVID-19.”

Property Council Group executive of policy and advocacy, Mike Zorbas, said the property industry was continuing to entice workers back to the city, including campaigns such as FOMO Fridays in Melbourne, which was held in conjunction with the City of Melbourne and the Australian Retailers Association. 

This included prizes, retail discounts, accommodation deals, as well as tickets to attractions such as the Broadway musical Frozen.

Visitors had also taken advantage of the Melbourne Money dining program, making rebate claims worth more than $3.5 million.

“Building owners and managers are not waiting for government leadership to drive CBD reactivation, we are proactively making the case for workers to return to their offices and enjoy all the benefits of face-to-face teamwork,” Mr Zorbas said. 

Meanwhile, visitors flocked to the city during the school holidays after a 105.7 per cent jump was recorded in pedestrian activity compared to the previous three-week average as of June 30.

Average pedestrian activity reached 62.6 per cent of pre-COVID levels at the end of June –

almost double the level of pedestrian activity seen during the recent lockdown •