PROPERTY JOURNAL

How Australia is getting back to the office

Data and technology have been essential in encouraging people back into the workplace in Sydney and Melbourne – and offer some hints about the shape of things to come

Author:

  • Amanda Steele

14 February 2022

Aerial view of Melbourne central business district

Offices in Australia have now reopened twice since the beginning of the pandemic, with a third opening anticipated, meaning that the country has insights it can share with other markets

The first re-opening in December 2020, followed a national lockdown (March 2020), when both domestic and international borders were closed. The second re-opening in September 2021 came after lockdowns in the cities of Sydney and Melbourne (June 2021), two of Australia's biggest business hubs. There has since been a third wave of work from home orders, with the rise of Omicron throughout December which we anticipate being in place until the end of February 2022.

Ensuring hygiene and restoring confidence

Getting people back to work following the first nationwide lockdown involved resilience, innovation and pilot schemes. Companies looked to both national health advice and to each other for effective approaches. 

The main responsibility for building managers, owners and employers was to ensure the safety of staff and ease anxiety about contracting COVID-19. This meant providing clear evidence of hygiene best practice in prominent parts of a building, such as communal areas and bathrooms. Signage detailing hygiene practices was also important, but at the same time it could not so overt as to create anxiety.

Proptech and facility management apps such as Host were used to ensure secure entry to buildings, and included QR code check-ins that could be monitored live. Real-time video technology was also installed in lifts, so returning workers could see how many people were using facilities and feel confident about returning to the office.

Many businesses split their workforce into two teams that would alternate their days in the office. This meant that, should someone test positive, not everyone in the company would be susceptible. Other employers adopted hybrid working policies, where staff could work in the office or online.

CBD and office visitation data from Sydney-based proptech start-up Pathzz showed that employees worked flexibly not just on a day-by-day basis but hour by hour, with many choosing to avoid peak commute times.

Adapting to the new normal

During the second reopening in Sydney and Melbourne, many of the same processes remained in place. However, there was a shift in sentiment as regulations became normalised, with people wearing masks and observing capacity limitations in communal areas as a matter of course. Given high vaccination rate across the states of New South Wales and Victoria, anxiety has naturally lessened as well. 

The lockdowns specific to Sydney and Melbourne saw more concern about the mental health of staff and working from home restrictions. As a result, once offices reopened many people were more interested in returning than they had been after the first lockdown.

As a result of employers' attempts to encourage workers back into the office, incentives were broadly proposed by companies and policy promises were debated regarding flexibility, space and wellness in order to retain staff. For instance, staff have requested more break-out rooms, green and wellness amenities in their offices. The use of adequate video technology is now viewed by staff as fundamental to working environments, and this will dramatically affect office design and the use of space. 

Interestingly, the use of more direct incentives such as free lunches is viewed as a short-term perk by employees. It will not be a way to retain staff who see a long-term need for flexible hybrid working.

'Staff have requested more break-out rooms, green and wellness amenities in their offices'

The next phase of office design

There are now two main trends when it comes to workspaces. Some companies are reducing office space, given that fewer people will be in attendance at the same time. Others in contrast are expanding or modifying office space to allow a larger area for each person.

The latter change in fact comprises two further trends: while the office for some employees is now considered a collaborative, social space for meetings, for others it needs to provide space for quiet, productive and sensitive activity. 

As the volume of returning employees increases, businesses will continue to analyse working patterns before making long-term decisions about occupancy and fit-out requirements.

That said, the central business districts (CBDs) of Australia's cities have already started to see major interest from larger corporates in new and bigger office buildings, sparking optimism for 2022. For example, a planned, A-grade tower being developed by the private Third.i Group for A$327.7m, due for completion in 2023, and other high-profile proposals are all being pushed to include the latest technologies. 

What the data says

Data analysis will also be key to future decision-making. CBRE recently invested in Pathzz as landlords and occupiers become more interested in customer insights.

Pathzz applies advanced artificial intelligence and big data processing to mobility signals and other descriptive data sets to help inform property decision-making. By using footfall patterns, it helps us more accurately analyse and forecast trends in returning to work. 

For instance, data up to 14 November 2021 tells us that, while vacancy in the Sydney central business district (CBD ) is still much higher than it was in early 2020, and visits are 70% lower than 2019 levels, footfall is in fact increasing. The figures are up by 63% around Wynyard rail station, 38% in Martin Place and 42% in Pitt Street Mall.

There has since been a third wave of work from home orders following the appearance of the Omicron variant. In Australia, this outbreak coincides with a normal 'out of office' period, during the summer holiday months of December and January, but the regulations are expected to last until the end of February, with masks mandated to be worn in a workplace setting.

CBRE office vacancy data and investor interest data in Q1 2022 shows that there is a positive move towards return to work, as vacancy declines and investor interest in the sector continues to increase. Additionally, investment from tourism departments throughout Australia's capitals are working with business representatives to facilitate CBD activations, that in turn are encouraging workers back into the city and into office settings.

Amanda Steele is executive managing director, property management, at CBRE

Contact Amanda: Email

Related competencies include: Asset management

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