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A view looking down Flinders Street.
Photograph: Weyne Yew

Melbourne has the lowest office occupancy in Australia and CBD businesses are suffering for it

Our city's daytime economy has badly failed to bounce back from the blows delivered by the pandemic

Liv Condous
Written by
Liv Condous
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There are few positives that came out of the harrowing months that Melburnians spent in lockdown during the Covid-19 pandemic. Some of us mastered the art of making bread from scratch, others managed to catch up on the TV shows we’d been meaning to watch on Netflix. It was a very weird time – and one that we don’t want to remember too much. 

But undoubtedly one of the biggest silver linings from that difficult period was the newfound capacity for many of us to work from home. It sure is nice to not have to worry about commuting on a crowded train five days a week, saving money and time in the process. But while this new working trend has benefited many of us, it had the opposite impact on our beloved CBD. 

Data from the CBRE Office Occupancy Snapshot revealed that Melbourne is lagging far behind other capital cities in city office occupancy, with only 56 per cent filled compared to 75 per cent in Sydney, 85 per cent in Adelaide and 91 per cent in Perth. This checks out, as Melbourne had the longest and strictest lockdowns in the country (and even in the whole world). 

Why is this such a bad thing, if city workers are loving the WFH life? Well, the CBD daytime economy is suffering. Many businesses rely on city worker customers as their main source of income and are now struggling to stay afloat now that those customers are no longer around. 

While Melbourne’s overall economic recovery from the effects of the pandemic has been pretty strong, with evening and weekend activity exceeding pre-pandemic levels, weekday activity during business hours is lagging far behind. In fact, data has shown that the level of activity at Flinders Street Station during morning commuter hours is only at 60 per cent of pre-Covid levels. So while our bars, restaurants and nightclubs are thriving, traders that run places like our lunch spots and retail stores are feeling the pinch. 

City of Melbourne councillors are rallying to sort this out and save suffering businesses by drawing more workers back to the city. In a recent Future Melbourne Committee meeting, Councillor Roshena Campbell said small businesses were paying the price for Melbourne’s failure to bounce back. 

“Other capital cities have bounced back in a way we haven't… our recovery has been slower and there's no doubt that is partly due to a series of extensive lockdowns,” Cr Campbell said. “That's in the past and we need to be focused on the future. And part of that future, for a capital city with a vibrant CBD, is bringing workers back.” 

The council plans to hold a roundtable with major employers in the city to work out how to incentivize office workers to return, as well as campaigning for public servants (who make up the majority of the city’s workforce) to return to the office. It is also encouraging CBD traders to shift their opening hours 'til later, so workers can benefit from being able to shop after they clock off. 

So while we all love a cheeky WFH day, will this new normal last? Only time will tell, but as much as we love being able to work from home in our loungewear, we sure would be sad to lose the unique small businesses that make our city so wonderful. Hopefully, there’s a happy medium. 

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