The desire to keep working from home at least part of the week is threatening the vibrancy of our CBDs and their ability to fuel the country’s economic recovery according to a new report. While we still intend our CBDs to be key parts of life, more needs to be done to entice us back to them more often business leaders say.

Research undertaken for the report Reimagining our economic powerhouses: How to turn CBDs into central experience districts revealed 70 per cent of CBD office workers wish to continue working from home most of the week – equating to just 3.3 days in the city. The report, prepared jointly by real estate firm EY and the Property Council of Australia, found preferred days to work from home were Monday and Friday, a factor that would deal a further blow to business, especially hospitality venues heavily reliant on trade from end-of-week office workers.

But given the nation’s CBDs were key to economic recovery and underpinned the entire process, it was time to “supercharge their revival” said Property Council of Australia chief executive Ken Morrison. CBD economies were the nation’s “engine rooms”, the four largest CBDS in Sydney, Melbourne Brisbane and Perth generating 15 per cent of the country’s economic activity, more than any other industry.

“People love their CBDs and the vibrancy and opportunity they provide,” Mr Morrison said. “Lively city centres are not only important for the thousands of businesses who rely on foot traffic, but also for millions of jobs and hundreds of billions of dollars in broader economic activity generated in our CBDs. The employment, productivity and economic benefits of enlivened CBDs is immense.”

The report called on governments, employers and property owners to work together to improve the vibrancy of the CBD and outlined a series of measures that would help re-energise city centres such as:

  • Reimagining unused premises by filling empty floor space with pop-ups to add vibrancy
  • Creating “central experience districts” and activating streets and precincts during the week with events, new late-night shopping days or night-time markets; working with retail stores and restaurants to foster more early-morning to late-night trading
  • Attracting workers back to the office via free public transport and parking especially on ‘slow days’ such as Mondays and Fridays; better indoor environments; tech-focused office strategies; redesigns that encouraged connection
  •  Encouraging landlords and tenants to focus on services such as health, wellbeing and technological features, as well as sustainability ratings and a strong customer experience
  • Supporting the “greening up” of workplaces and streetscapes
  • Offering commuters more choices in the way of cycling, walking, e-bikes or scooters

Urban Taskforce CEO Tom Forrest supported the guidelines while adding that planning laws needed to be eased and made more flexible to avoid undermining long term success.

“Demand for premium office fit-outs remains high in Sydney, reflecting ongoing confidence among the big employers that growth of the CBD is assured,” Mr Forrest said, “Where a flexible workplace works – it will be the future. World leading technology giants have moved back to CBD office working as they and other businesses know the benefits of collaboration and mentoring arise from incidental contact – not organised Zoom or Teams meetings. The world’s top tech-talent are also highly mobile. They seek offices which are close to bars, restaurants, night clubs and their apartment. Flexible mixed-use buildings are what Sydney needs.” 

Likewise, Restaurant and Catering Industry Association of Australia CEO Wes Lambert agreed with the report’s recommendations, adding that reviving CBDs depended on a combination of increasing demand with other measures.

“It will be important that rents continue to align with the ‘new normal’ as we emerge from the pandemic,” Mr Lambert said. “It’s imperative landlords and their tenants continue to partner in the recovery and on ideas like rent based on turnover and incentives so businesses can keep trading as we emerge from the pandemic. Landlords need to understand that it will take time for a lot of people to feel safe enough to return to the city.

“There also needs to be an easing of red tape and bureaucracy to allow the use of all outdoor spaces available for outdoor dining.”

Substantial recovery of capital city CBDs would take the best part of the year, requiring not only the return of office workers but also that of international and domestic tourists, overseas students and working holidaymakers. “This is about enduring while we wait for potential customer numbers to increase when borders reopen,” Mr Lambert added.

Other findings from the report - based on a survey of 600 CBD users, Property Council of Australia data, academic research and interviews with 26 “big thinkers” locally and internationally  - include 65 per cent believe CBDs continue to provide memorable experiences while 60 per cent rate them an ideal place to meet in small groups or large groups (54 per cent). Almost 70 per cent feel CBDs hold the best bars or restaurants, 65 per cent rank it best for fashion shopping and just over 60 per cent say it is the best location to attend events and entertainment.