The premium office towers that dominate Sydney and Melbourne’s skylines are effectively empty, with occupancy hitting an all-time low while stay-at-home orders keep workers away.
Extended lockdowns across Australia’s two largest cities in August saw occupancy in Sydney’s CBD slump to just 4 per cent, while Melbourne’s plunged to a record low of 7 per cent compared to pre-pandemic levels, Property Council of Australia figures show.
Office occupancy is a key indicator of much-needed activity for shops, restaurants and other city-based services that depend on patronage from office workers.
“All the gains made earlier this year to reactivate the city have now been lost as workers have again been forced to desert the CBD in droves due to lockdown, and the city again resembles a ghost town,” the PCA’s Victorian executive director Danni Hunter said.
Both cities face a huge task to revitalise and rebuild when restrictions lift and, unless they do, small business operators warn they will hit the wall.
We’re getting to the stage where we are going to have to walk away from a few.
Cafe owner David Makin
David Makin, who runs Axil Coffee Roasters’ 16 venues in Melbourne, said he will likely close several cafés when the government-mandated code of conduct for rent relief finishes in February next year.
Just six of his cafés are currently open for take-away business and only one of those is in the CBD.
One Axel Coffee venue in the city has got more than $100,000 in deferred rent. “We’re getting to the stage where we are going to have to walk away from a few,” he said.