Latest thinking on the future of Australian capital city CBDs paints a picture of smaller offices, increased co-working space and larger outdoor recreational areas.

Workplace analysts, architects and demographers concur that, post-pandemic, CBDs will still be a vital cog in the economy but undergo a “reimagining” as their purpose shifts. This will involve the number of people working in city centres dropping over coming years and tenant mixes changing from those dominated by corporate head offices and leading organisations to being more diverse, filled with entrepreneurial firms, start-ups, and small to medium-sized businesses especially in IT.

Blueprint for recovery

These views were also echoed in the 2021 Infrastructure Australia Report released last week. The blueprint for national recovery following natural disasters and COVID-19, the report by the nation’s chief infrastructure advisory body provides a comprehensive roadmap across multiple areas to 2036.

“Infrastructure investment is at record levels across Australia, demonstrated by the Australian Government’s historic $110 billion infrastructure commitment,” Infrastructure Australia’s chief executive officer Romilly Madew said in a statement. “The 2021 Plan highlights the importance of leveraging this investment through targeted reform to deliver better infrastructure services for our communities.”

Staying close to home

The rise of a hybrid office/work-from-home model that will help reshape CBDs alongside record infrastructure projects across metropolitan and regional areas is accelerating the shift in the way we work. Neighbourhood business hubs will be the norm simply because WFH and social restrictions have made people less willing to commute long distances. The closer they can live to work the better.

“We think 10 per cent of workers each day will work from home who would not have been doing that prior to COVID-19,” said Peter Colacino, Infrastructure Australia’s chief of policy research. “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. Some businesses will downscale their core CBD offices and invest in outer metropolitan office space.”

As such it will become more common for large companies to shift head offices and entire workforces from a place such as Sydney’s CBD to regions like Greater Parramatta where a 20-year development plan will see the area transformed into Greater Sydney’s Central City by 2036.

City newcomers

Likewise, a global survey by PwC’s Future of Work team of 32,000 workers found 74% of people wanted to remain with hybrid work, with only 10% preferring a return to full-time office life. Dr Ben Hamer, a director with the PwC Future of Work team, said an increase in affordable, flexible city offices and co-working spaces was already reshaping CBDs across Australia as it allowed businesses previously priced out of the market – the start-ups, medium-sized firms and smaller tech companies - to have a coveted CBD address for the first time. The influx of such organisations would contribute significantly to the economic and social revival of capital CBDs, Mr 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.” Mr Hamer said.

Esteemed architect Norman Foster who has exhibited in London on the future of cities and written extensively on the subject said the pandemic hastened changes to cities that were already afoot. He believes traditional workplaces will survive but be appreciated more for the social interaction, creativity and connection they allow rather than simply being a place to toil. For knowledge workers, having the flexibility to work anywhere will reign – whether from their office, home, nearby park or exotic destination. City centres as a consequence could be made greener, more walkable and bikeable, Mr Foster said, pointing to examples like Boston’s Big Dig. The most expensive highway project in the US, the Big Dig involved moving Boston’s major interstate highway underground into a 2.4km tunnel which was then covered with an equally long landscaped greenspace of parks, gardens and public boulevards.   

Owners of Australia’s co-working spaces also see their industry benefitting from the recalibrations ahead. In the last 18 months since the pandemic started, one relative newcomer to the industry in Melbourne, CreativeCubes.Co, has grown its footprint to 15,000sqm with another 15,000sqm still to come Founder Tobi Skovron  told Commercial Property Guide that despite Melbourne’s current lockdown strong demand is coming from small to medium sized enterprises for his co-working spaces located in Hawthorn, Richmond, South Melbourne and Carlton. Businesses are looking for more appealing spaces than corporate offices to inspire their employees to return to the workplace once lockdown ends, he said.

“They want to leverage CreativeCubes.Co as an employee experience,” Mr Skovron said. “Working from home is wearing thin for many of their employees so they want them to be inspired to go back to work by providing them with a place that’s local, closer to home, and where they’re around like-minded uplifting people.”