Perth and Adelaide lead the pack as Australians return to the office

Australian workers are returning to the office in ever growing numbers, with Perth and Adelaide leading the pack, new CBRE data shows.

Excluding the traditionally quieter holiday months of December and January, Australia’s CBD office occupancy rate averaged 76% of pre-COVID levels in Q1 2024, up from 70% in Q4, 2023 and 67% a year ago.

CBRE’s Australian Head of Office Research Tom Broderick said the improved trend was in stark contrast to the US, where office attendance had stabilised at about 50% of pre-COVID levels.

“Australia’s capital cities have the benefit of better access to public transport, shorter commute times and lower inner-city crime rates,” Mr Broderick said.

“CBRE Research expects occupancy levels in Australia will continue to rise over the remainder of 2024 and beyond, particularly on non-peak days. Businesses are continuing to incentivise workers to encourage this return to office theme and are also investing in higher quality accommodation to earn the commute.”

CBRE’s Pacific Head of Investor Leasing Tim Courtnall said enticing work environments were a key drawcard, which had been demonstrated through CBRE’s relocation data.

“Just over two-thirds of the businesses that have moved premises in the past three years have upgraded to a better-quality office building. Feedback from some of these occupiers suggests a significant improvement in employees returning to the office following a move to new generation office stock,” Mr Courtnall noted.

“Some organisations are also starting to link pay and promotions to office attendance, linking this to enhanced corporate culture and the contributions this makes to the mentoring of younger employees.”

CBRE’s Australian CBRE Return to Office Indicator shows that occupancy rates improved in all CBD markets between Q4 2023 and Q1 2024.

Melbourne was one of the standouts from an improvement perspective, with the CBD occupancy rate rising from 57% to 62% over the quarter.

However, the smaller cities of Perth and Adelaide have the strongest occupancy rates at 93% and 88% respectively.

“These markets have shorter commute times for employees and working from home has been less structural in these cities. Peak days in Perth and Adelaide are almost back to pre-COVID norms at 96% and 94% respectively and there is also less discrepancy between attendance on different days of the way compared to the larger cities of Sydney and Melbourne,” Mr Broderick said.

Australian Office Occupancy by CBD Market in Q1 2024 (compared to pre-COVID levels)

Other key trends

• Brisbane’s occupancy averages 83% and 87% on the peak day (Tuesday). The return to office has been similar to Perth and Adelaide, however about 35% of the occupier market involves public sector tenants, that have been slower to return, and this has weighed on Brisbane’s overall results.
• Sydney has improved from an occupancy rate of 65% in Q1 2023 to a 77% weekly average in Q1 2024. The major banks and professional services firms are becoming more assertive in their return to office plans which is likely to have underpinned this rise.
• While Melbourne and Canberra have the lowest attendance rates, both markets have improved over the past 12 months, coming off a low base.
• Melbourne’s average weekly occupancy continues to be impacted by low levels of attendance on Mondays and Fridays, which is 20 percentage points lower than the mid-week average of 71%.