CBD Gain as Melbourne Returns to the Office

Victorians can officially turn off their out of office notifications as they return to Melbourne CBD offices this week.

Premier Daniel Andrews has green-lit a staged return to the workplace with no evidence of community transmission of Covid-19, and said it would rejuvenate the embattled CBD.

“This will be a massive boost not only for the office workplaces in the heart of Melbourne, but the cafes, restaurants, bars and shops that rely on their business.

“It will be fantastic to see the city coming alive again,” Andrews said.

The Victorian public service will operate at 25 per cent capacity on-site, while other offices can increase to 50 per cent capacity.

But businesses will be forced to continue the record keeping of all workers and visitors who attend the premises for longer than 15 minutes.

It’s welcome relief for the beleaguered commercial office space market, which took a significant hit in 2020 with extended lockdowns and a shift to working from home.

There was significant investment in new office space already in the pipeline when Covid-19 hit, with a further 1.2 million square metres to be added to CBDs across the country by the end of 2022, two-thirds of which was in Melbourne and Sydney.

According to Deloitte’s quarterly Business Outlook report the value of building approvals is now falling at double-digit rates. Commercial construction is forecast to return to making a positive contribution to the Australian economy in late 2021.

The report is, however, optimistic about Victoria’s recovery, forecasting 5.3 per cent growth in the economy this year, the fastest in the country. Similarly, Victoria’s labour market has also bounced back from a Covid low in September 2020 to just 2.1 per cent below pre-Covid levels at the end of November.

The Australian Industry Group welcomed the move to allow employees back in the workplace.

But Victorian head of the Ai Group Tim Piper said more needed to be done to change the new permit system and allow greater movement between borders for businesses that needed to use interstate employees.

“[It] is causing considerable strain for some businesses, particularly those who need to use interstate workers in Victoria or to send workers interstate for projects.

“Work in other states is being impeded as businesses and employees don’t want to leave Victoria if there is a danger that they may not be able to return,” Piper said.