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Office workers return, but will the CBD ever be the same?

But others are less sure. The majority of 503 people employed in the city told Roy Morgan – in a poll commissioned by the City of Melbourne in November and December – that they were willing to return to the office, mostly because they missed the routine and their workmates.

But 32 per cent of people would like to work mostly from home and 42 per cent would like to have some regular days at home. Another 18 per cent would like to be able to work remotely when needed.

Prior to COVID-19, only 17 per cent of CBD workers routinely worked from home. Another 26 per cent did so when necessary.

The biggest barrier to getting people back into the office was COVID-19 safety in public (80 per cent of respondents), COVID safety at work (77 per cent) and commuting or parking (77 per cent). Seventy per cent said losing flexible working arrangements was a barrier to returning to their office.

Among those most reluctant to return to their workplaces full-time were people aged 35-49 years with school-aged children.

Management consultant Mark Geels is looking forward to getting back to his desk and seeing his colleagues but expects to continue working from home in some way for the foreseeable future.

“I’ll keep it as flexible as I can. Our workplace very much encourages flexible working and has done so even before the pandemic, but it’s never been as well followed as since the pandemic,” he said.

“I’ll never say never, but I don’t envisage [going to the office] five days a week at least for the next six months.”

He said the pandemic had proven that office workers could be productive at home, but that staff were missing catch-ups and chance encounters with their colleagues.

“Every meeting has to be planned. Rarely are they just spontaneous, and that’s what you really miss out on.”

Melbourne lord mayor Sally Capp has pushed for workers – “a vital part of what makes our city great” – to get back into the CBD to help cafes and bars that rely on office staff.

“Our message to workers returning to the city is that we’ve missed you, welcome back,” Cr Capp said.

Mr Geels said workers benefit from chance encounters with their colleagues.

Mr Geels said workers benefit from chance encounters with their colleagues.Credit:Jason South

Victorian Chamber of Commerce and Industry acting chief executive Dugald Murray has predicted that staff numbers might not increase beyond 60 per cent of capacity even when restrictions are eased again in late February, subject to health advice.

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Commercial vacancy rates increased to 13.2 per cent in the last quarter of 2020, according to new data from Macquarie, which described it as “the worst year for demand on record”.

There were 68,000 square metres of empty office space in Melbourne in the quarter, compared to 57,000 in Sydney.

Cr Capp said the council could consider converting under-used offices if working arrangements change in the long term, and acknowledged the city would have to adapt.

“This requires a mindset and policy change after years of managing the momentum of a strongly growing economy,” she said.

“There are going to be challenges for our economy with fewer workers in the city for the immediate future. We also don’t know how flexible working arrangements will play out in the medium and long term.”

“Our team will also be studying our residential population and what opportunities there are to convert under-utilised commercial buildings into apartments and creative spaces.”

However, she said Melbourne “can’t be replicated” and events, hospitality and retail need investment to “build on our strengths to entice people to return”.

Professor Buxton believes the emptying out of commercial buildings will be temporary, saying the greater threat to the CBD was the loss of international students and short-term renters in high-rise apartments.

It’s those buildings that could need to be repurposed for new tenants, he said, cautioning it was too soon to say whether this would eventuate.

“We might just have to look around for other ways to fill large numbers of vacant apartments. One option is public housing, for example,” Professor Buxton said.

He said Australia was one of the only countries in the western world to construct high-rise residential apartments that rely on international arrivals, a “risky model” dependent on international relations.

Before the pandemic hit, students comprised 45 per cent of the residential population in central Melbourne at the time of the 2016 census, many of them international students.

About 40,181 people lived in the CBD in 2016, which was expected to grow by an average 4.1 per cent a year, according to forecasts prepared for the City of Melbourne in 2019.

Danni Hunter, Victorian executive director of the Property Council of Australia, agreed there would be challenges for residential developments without international students.

“Everything’s changed, the fundamentals of what makes the property industry tick has really changed, but there’s a lot of opportunities in it,” she said.

Ms Hunter said there would be a period of transition before it became clear which behavioural changes became permanent.

“The property industry is extremely agile and is already responding to these rapid trends as we change floor plates, build in home offices and become ultra-connected across locations.”

Back in the 1990s, the city council and state government transformed the CBD by encouraging residential development under the Postcode 3000 project, which led to empty office buildings being converted into apartments. It brought thousands of residents into the city.

Several candidates in last year’s city council election advocated for again repurposing empty office buildings into social housing or artist hubs.

Mark Feenane, executive officer of the Victorian Public Tenants Association, said that could be a feasible option to address the shortfall in public housing.

“If existing buildings can be repurposed into safe, long-term housing that gives Victorians an opportunity to live with dignity, that would warrant serious consideration.”

COVID-19 rules changing from 11.59pm on Sunday, January 17

-From Monday, private workplaces will be able to increase to 50 per cent staff capacity and the Victorian public service will be able to return to 25 per cent staff capacity at each site.

-Masks will no longer be required in most workplaces. They will only be mandatory on all domestic flights, at airports, in hospitals, on public transport, in commercial passenger vehicles, at supermarkets and shopping centres.

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