Melbourne’s office occupancy has plunged to its lowest level since the end of last year’s 112-day lockdown as the city’s CBD continues to languish.
A survey by the Property Council of Australia shows office occupancy in Melbourne’s CBD fell to just 12 percent in July, down from 26 percent in June and the lowest level since October last year.
This is yet more bad news for retail, hospitality and other businesses reliant on the presence of large numbers of office workers.
Melbourne office occupancy below most other cities
Apart from Sydney, where office occupancy dropped to six percent in July as the city endured a protracted and ongoing lockdown, Melbourne’s occupancy levels have remained behind the rest of Australia’s capital cities since the pandemic began.
“After climbing back to 45% of pre-Covid levels in April this year, office occupancy in our CBD has continued to go backwards as Victoria had endured repeated lockdowns in recent months,” said the council’s Victorian Executive Director, Danni Hunter.
“All of the gains of earlier this year have now been lost as workers have again deserted the CBD, with no sign of a bounce back as we endure our third lockdown in as many months.
“It follows last week’s Office Market Report, which showed vacancy rates in Melbourne’s CBD are now at a 20-year high and demand is the lowest since the recession of the 1990s.”
City’s CBD is in crisis and requires urgent attention
She added: “Until vaccination rates increase, we face the prospect of more lockdowns. Clearly our CBD is in crisis and needs urgent attention. We have seen a number of survival plans, but we now need a plan for revival.”
According to Hunter, the plan needs to address how to attract people safely back into the CBD to support the retail and hospitality sectors, as well as attract new long-term investment so Melbourne continues to be a viable place to live, work and invest.
“We need to bring together all the key stakeholders including the Victorian Government, City of Melbourne and business to look at innovative ways we can revitalise our CBD,” she noted.
“We’ve seen a continued population drift away from Melbourne to regional areas and other states like Queensland. We need to act now to prevent further drift.”