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City centres evolve as the pandemic changes the way we work

“We think 10 per cent of workers each day will work from home who would not have been doing that prior to COVID-19,” he said. “Because the longer this experience goes and the more accustomed people get to working from home – and the more investments they make in their [home] equipment to work from home – it will be easier to work from home.”

The Committee for Perth – a sister body to the Committee for Brisbane – will soon present a report on the Future of Work for Perth, while the Property Council of Australia will host Infrastructure Australia next month to debate the changes.

Reimagined CBD workspaces will be smaller and allow more collaboration between employees.

Reimagined CBD workspaces will be smaller and allow more collaboration between employees.Credit:Source PwC. Future of Work.

But Infrastructure Australia says CBDs are evolving, not dying, Mr Colacino said.

“The role of the office will change, they will become collaboration spaces,” he said. “The idea of an endless sea of cubicles with people staring at computer screens, shooting emails to the guy who sits on the other side of the partition won’t occur.

“If that is the way you work, there is no reason not to do it from home and avoid the commute.”

Dr Ben Hamer, a director at PwC’s Future of Work team, said capital city CBDs had historically adjusted to change.

Occupancy rates in Australian capital cities February to June, 2021

                                     Feb-21    Mar-21    Apr-21    May-21    Jun-21

  • Melbourne:     27%         39%          45%        45%        26%
  • Sydney:           54%         56%          65%        68%        67%
  • Brisbane:         72%          69%          70%        71%        71%
  • Canberra:        72%         72%           70%        71%         72%
  • Perth:              72%          79%         78%        77%         76%
  • Adelaide:         77%            79%         78%       78%         80%
  • Darwin:           89%            93%         93%       93%        88%
  • Hobart:           84%             89%        91%        93%        89%

“We are going through a pretty deep hit as far as economic activity goes at the moment,” Dr Hamer said. “What we are expecting is the CBD will bounce back, but it will be reimagined.”

The Property Council of Australia released information showing how capital city CBDs – except Melbourne and Sydney – were beginning to recover until the Delta strain caused major lockdowns.

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The changes will come from small- to medium-size firms, start-ups and more technology-driven companies that were previously priced out of CBDs. These companies will move in to sub-let spaces as bigger firms downsize, Dr Hamer said.

“As tenancy opportunities open up, we will have a much more diverse mix of organisations in the CBD, which we feel will fuel innovation.”

Dr Hamer said cities were now in “a holding zone”, with organisations locked into long-term tenancy agreements.

He said the health concerns of employees were still shaping the views of most employers in both the public and private sectors.

But while CBD’s will recover economically, Dr Hamer said their make-up would change over the next five years.

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“Seventy-four per cent of Australian workers want to work from home two to three days a week, and the rest from the office,” he said. “Only 10 per cent want to work five days a week from the office. The change is huge.”

Over time, larger firms will reduce their floor space and more activity will begin in the “suburban economy”, Dr Hamer said, echoing Infrastructure Australia’s findings.

“This is what we call the neighbourhood business centres evolving, and I think we will see a lot more co-working spaces eventuating as well.”

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