Australia bounces back as office space demand increases in 2022

Strong tenant enquiry and transactional activity in major cities have spurred this road to recovery during the latter half of 2021

“CBD’s and office working is not dead, far from it,” Property Council of Australia CEO Ken Morrison told Sky News Business.

“For everybody who cares about our CBDs, this is good news because it means the economics underpinning our CBDs are actually very strong,” he added. 

This stemmed from his previous statement that businesses across Australia have voiced their opinions on how working in a CBD office was essential to them.

While office vacancy rates in Melbourne and Brisbane have risen to 11.9 percent and 15.4 percent, respectively, they are expected to reduce later in 2022. Sydney’s rate, however, remains at a solid 9.3 percent.

According to Commercial Real Estate, Property Council NSW executive director Luke Achterstraat stated at an industry event on Thursday that it is crucial that office workers experience the energy of working in the city and in the company of their colleagues. Deborah Coakley, executive general manager funds management Dexus, also added that Sydney has a strong urge to have that semblance of normality, which will drive economic growth this year.

More: Australian residential market breaks records in 2021

Despite some pessimism, the number of tenants planning to enter the market, along with the 4.5 percent growth figure forecast for this year, makes 2022 an exciting year for the CBDs.

Employees would have to see a much safer workplace than what they left it before COVID-19 to be convinced to return. A company that wants its employees to return to CBDs should consider social distancing, good ventilation, and smart innovations.

Strong tenant enquiry and transactional activity in major cities have spurred this road to recovery during the latter half of 2021, and while Melbourne and Sydney were on lockdown for the majority of this, tenants still voiced their office accommodation strategies.

Mark Curtain, CBRE head of office leasing, Pacific noted “Net absorption across Australia for the full year improved significantly, recovering all of the ground lost in 2020 and then some. Most markets have now passed the worst of the downturn, and we expect the recovery story of the Australian office market to continue in 2022.”

The Property Report editors wrote this article. For more information, email: [email protected].