Australia’s Office Market Thrives Post-Pandemic, Outshining U.S. Stagnation

New data shows how Australia’s return to office efforts are impacting the nation’s high office occupancy rates — revealing success that is outpacing recent waves of RTO mandates in the United States. 

It’s a trend that also has many cities across Australia moving towards occupancy levels not seen since before the pandemic. 

The findings stem from a CBRE report, which analyzed office data within Australian cities like Perth and Adelaide revealing they are reaching near pre-COVID occupancy levels, at 93% and 88% respectively in Q1 2024. 

The contrast with the U.S., where office attendance has stagnated at around 50%, this reflects a dramatic difference in work culture. 

According to CBRE’s report, “Australian cities typically have better access to public transport, shorter commute times and lower crime rates in inner city areas. All of these factors are likely to contribute to better office attendance in Australia. All Australian CBD markets improved compared to Q4 2023, with Melbourne one of the standouts, rising from 57% to 62% over the quarter.” 

These factors, combined with aggressive employer-driven initiatives including upgraded office spaces and incentives for in-office work, are drawing employees back to the workplace.  

CBRE’s Q1 data reveals the average occupancy reached 76% compared to pre-covid levels — up from 70% in Q4 2023, and 67% year-over-year. 

According to a report published by The Property Tribune, many employers are not only improving physical office environments but are also linking opportunities for career advancements and pay raises to office attendance.  

This strategy is revealing of the value placed on face-to-face interactions by corporates across Australia. However, it does reflect similar ideas of collaboration in the U.S. where big technology firms like Apple, Google, Amazon, and Zoom, traditionally known for their flexible work policies, are now advocating for increased physical presence to spur innovation. 

However, the overall U.S. office market is not exactly growing. Recent data published by JLL,  shows an increasing reduction in U.S. office inventory each year since the start of the COVID-19 pandemic, including conversions to residential use. 

It also shows 9 million square feet of office space were withdrawn in Q1 2024, exceeding supply for the first time ever and decreasing the national office inventory by 1.3 million square feet.  

Also in the U.S., hybrid work models seem to be striking the right balance for many businesses, including tech firms. However, there are a handful of other influential tech firms including Lyft, Adobe, and Airbnb that still uphold remote work policies for employees.   

According to CBRE, “Australian firms are continuing to navigate the complex terrain of returning to the office, employing various strategies to balance productivity, employee well-being, and safety concerns. Some organizations continue to allow very flexible working arrangements with no set targets for office attendance. However, others continue to look for ways to improve attendance with varying degrees of success.” 

Australian markets are expected to see continued improvements in terms of occupancy and, in doing so, it sets a precedent for other nations grappling with post-pandemic workplace transformations.