Rising Office Occupancy Rates: Contrasting Trends In Australia

Office occupancy rates in Perth and Adelaide have surged to peak levels, reaching the high nineties while the Australian office market sees a notable increase in occupancy, contrasting with the slower return to office in the United States.

CBRE's latest research reveals rising occupancies across all office markets in Australia for Q1 2024, excluding the quieted holiday periods. Nationwide, office occupancy has risen to 76% of pre-Covid levels during this period, marking a significant nine-percentage point increase from a year ago and a six-percentage point increase from the last quarter of 2023.

In contrast, the US office attendance rate has stagnated at around 50% of pre-pandemic levels over the past year.

Tom Broderick, CBRE's director of research in Australia, attributes Australia's success to factors like better public transport, shorter commutes, and lower inner-city crime rates in capital cities, particularly Adelaide and Perth, which boast the highest occupancies in the country.

Broderick notes that these cities have shorter commute times and less reliance on remote work, with peak days in Perth and Adelaide almost back to pre-COVID levels at 96% and 94%, respectively.

Companies are heavily investing in in-person services, leading to more luxurious office spaces with enhanced amenities to attract workers back to the office, according to Broderick.

Tim Courtnall, head of investor leasing for CBRE in the Pacific, has observed a correlation between office improvements and personnel growth. He notes that approximately two-thirds of recent relocations have been to higher-quality office blocks, resulting in improved employee return rates.

Courtnall also mentions organizations linking pay and promotions to office attendance to foster enhanced corporate culture and mentorship opportunities, noting the positive impact regular office attendance has on corporate culture and mentorship of younger staff.

There are concerns over the productivity and integration of new employees, particularly at the graduate level, due to infrequent office attendance of other team members, according to the CBRE report.

Even in the tech sector, efforts are being made to bring team members back to the office, recognizing the importance of in-person collaboration and interaction in driving innovation.

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Source: Property Tribune

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