With the ongoing difficulty in attracting staff back into the office, it hasn’t just been employers adding perks to the work day, with office owners continuing to ramp up their offerings to occupiers. Activities on offer vary considerably from pride month events, pilates, wellbeing sessions and Easter egg hunts as well as treats, drinks, and local discount food offerings to draw in staff. This has gained good results improving peak workdays over the last few months. Post COVID-19 we have seen an increase by institutional owners to create sub-communities within their office buildings, growing their offerings from concierge services to entertainment events, working with tenants (as well as local food retailers) and their employees to grow vibrancy in their workplace and within their buildings reducing the threat of relocation or sublease.
Across the broader leasing market there have been mixed results. Relocating tenants continue to grapple with their space use requirements, often opting for smaller or the same size accommodation options, happy to allow for growth via work from home. Sublease continues to be a contributing factor to the overall vacancy environment with banks, legal, and technology users just some of the tenants handing back space. Encouragingly though, these fitted out spaces are the greatest in demand for those in the market as incentives continue to grow.
The tight employment market has been a contributing factor to the increased flexibility given to staff, allowing greater work from home and varied start and end times. National unemployment in February fell back down to 3.5 per cent after rising to 3.7 per cent in January which many thought would be the start of a push upwards which may signal a slowdown in work from home habits. Each State however, have had varied results with NSW and Victoria holding stable on their unemployment at 3.2% and 3.7 per cent respectively, while SA has recorded their all time historic low at 3.8 per cent There has been some upward movement in Queensland and WA compared to late last year now at 3.8% an 3.9% respectively, these markets also feature some of the highest office occupancy across the country, albeit this more aligned to reduced lockdowns.
Looking across Sydney, public transport rates are a telling factor of office occupation. Public transport statistics from Transport NSW highlights that current (February 2023) travel on all modes is down 28.3 per cent compared to February 2019, while both train and bus travel are down circa 40 per cent, however, overall results have been propped up by the improved and extended light rail and new metro system. While these may seem poor results, there has been a great upward shift in activity since February 2022 which recorded a 118.3 per cent decline on current results despite this period being business as usual with no lockdowns or restriction on travel.
Considering the Sydney CBD alone, transport into the city records approximately 380,000 tap-ons Tuesday to Thursday, while Monday and Friday are slightly more quiet, ranging between 280,000 and 320,000. The working day is also an interesting one to watch, peak travel sees most travellers into the CBD before 9am however a growing number fall into the 9-10am category, greater than the 7-8am group. Home time has a much broader spread with many tapping on in the CBD anytime from 3-6pm with the greatest cohort tapping off home between 5-6pm. While this may be unsurprising, the second greatest cohort are home before 5pm with those arriving home after 6pm a smaller proportion. So while we are getting staff back into the office, we are seeing more flexible start and end times and an overall shorter average working day. For markets such as Parramatta CBD the results are even more outstanding, while there is a high drive population into this office market, public transport is highest on Tuesday and Wednesday; with Monday, Thursday and Friday showing a 15 per cent to 35 per cent decline in custom, however, peak times are more stable representing a clear 9am to 4-5pm work day.
