NATIONAL MARKET STATUS:
- Property Industry and Government are encouraging return to office, but this is not at the rate that was anticipated
- Organisations across the country have started to assess head-count expectations for the next 12-18 months, including their return to the office strategies
Insights from the TRS team suggest that:
- Most larger organisations have their workforce still working from home in part or full time
- Executives are still trying to assess the pandemic’s long-term effects on their business. Firms are contracting or deferring any decisions about office space requirements, especially in Victoria
- For Sydney and Melbourne CBDs’, the office vacancy rate has doubled what they were a year ago
- Supply has exceeded demand with a negative net take up of space of nearly 200,000 SQM during this last quarter. This is compounded by the increase in sub lease space from organisations who have released excess space across multiple sectors
- OUTLOOK:
- With the larger vacancy rates in Melbourne and Sydney CBD, the value of some towers could drop in value by as much as 15% as rents also fall
- There are significant further rises in incentives nationally, as building owners try to preserve both occupancy and face rents
- It is likely to expect negative demand for office space for much time, with organisations flexible with staff to continue to work from home
