One of the latest analytical tools for commercial real estate reveals Sydney CBD is re-emerging from lockdown twice as fast as last year. In good news for agents, landlords and property managers, new data from the Pathzz proptech platform shows the CBD still holds appeal for workers with business recovery tracking at four to six weeks – roughly half the time taken to reopen after the first snap lockdown in March 2020. 

The findings are documented in the first Office Visitation Insights report from CBRE in partnership with Pathzz platform. The tool tracks mobility signals via artificial intelligence to allow better and more informed decision around such areas as rent negotiations, leasing and marketing. In this instance, Pathzz was used to delve into real-time visitation and demographics within 95 of Sydney CBD’s largest buildings. Results showed a “return to office snapback”.

While researchers largely attributed the snapback to employers’ return-to-work policies, several other trends emerged from the analysis of Sydney CBD visitation between October 2019 to November this year:

Workers prefer some buildings over others:

14 of the 95 buildings analysed had significantly higher visitation. These buildings had one or a combination of factors in common - being occupied by essential services and located in proximity to food and retail outlets as well as public transport hubs. Another factor that appeared to influence higher numbers in these buildings was if the main occupier had a strong emphasis on return-to-work.

Friday is back:

Previous observations of CBD recovery showed Tuesday to Thursday as the preferred days for getting back into the swing of office life, with Mondays and Fridays spent working from home due to a reluctance to completely give up the convenience of remote work. Pathzz data however showed just as many workers turned up on Fridays as other days, with “no signs of changing in a post-COVID environment”.

Millennials are (slightly) bucking the trend:

The 21 to 39-year-old age bracket has been a little slower to return to regular workplaces, Pathzz data showing a 5% decline from the previous post-lockdown period suggesting “more could be done to encourage visitation from Millennials”. Workers are more likely to return to work if they feel their workplace is safe and “well”, has been designed with a variety of inspiring spaces for collaborative and solo work, and is appointed with appealing amenity from outdoor spaces to gyms and other wellness facilities.

Shorter commutes are best:

Train travel and driving – the two most popular forms of transport for those who need to commute long distances – fell dramatically. Bus and ferry travel however rose significantly supporting market views that shorter commutes are favoured in these early days of returning to work .

Increasing workplace appeal:

Workers are being encouraged to return to work via interior design strategies. Most pronounced trends involve reviving ground floors and making building entrances more engaging with such additions as pop-up retail, upgrading offices and creating more common areas, and investing in natural office elements from better ventilation to plants and greenery for both beautification and wellness reasons

Agents in the leasing space can also gain insight from the observations of Jones Lang LaSalle executive Peter Miscovich. The New York-Based managing director of the global real estate investment and management firm has been involved in workplace transformation for almost three decades and recently revealed which corporate office styles are currently proving most popular in the US.

“We’re now looking at corporate headquarters that are 80 to 90 per cent interactive and collaborative, and technology-enabled space and maybe 10 to 20 per cent individual workspace,” Mr Miscovich told the media. “Individual work can be done at home, and people will go into the office to socialise, collaborate, and to build community.”

In Australia tenants are continuing to move, with JLL reporting absorption of space across all capital CBDs in the September quarter was the highest in over three years at about 70,000sqm. In Sydney, latest office market data from JLL Australia shows one of the biggest drivers of CBD office demand from now into early next year will come from tenants taking advantage of current low rents and increased incentives to upgrade to better quality office space. Easing restrictions and 80%-plus vaccination rates are also giving businesses more clarity which in turn will buoy “leasing activity over the short term”.

JLL Australia’s Melbourne forecast sees leasing continuing to recover but also warns demand will be more subdued than in Sydney with a proportion of tenants holding off on signing leases until the New Year. Effective rents are predicted to keep declining during the remainder of the year. Prime yields however are holding steady due to” strong investor demand for assets with income security and strong covenants.”