“Any old vacancies that come up [on the market]if the equipment is more than five or seven years old, they have to be reinstalled,” he said.
“It is essential in this current environment because everything that presents itself as just four walls and an empty space will be left behind. People know what they want: lighter, brighter, cooler and more collaborative spaces.”
New shower and changing rooms at 136 Exhibition Street. Credit: Jason South.
The Property Council’s report pointed to an oversupply of second-grade offices, with 14% of lower-grade buildings empty compared to 12% of prime buildings. The only category of office space with increasing demand in the past six months was luxury “prime stock” buildings.
“It’s like the residential market these days; if he is not disguised, he will have difficulties”, said Martínez.
Ashley Buller, head of Victorian office leasing for commercial real estate agency CBRE, said her company was also aware of the demand for high-quality offices.
“High-rise and premium rentals in Melbourne’s east end have increased strongly, with a number of transactions reflecting improvements of 15 to 25 per cent over pre-Covid levels,” he said.
The rise in empty offices continued even as the number of people returning to work in city offices stagnated. Office occupancy stagnated at 49 percent in June, according to the lobby group’s most recent figures.
“Right now we’re in a holding pattern because we clearly have a spike in COVID in the community, [and] some reinforced health messages and advice. But that won’t last forever,” Lowcock said.
“We’re having a tricky winter, but from what we’ve seen in other cities, we definitely think Melbourne is capable of further increasing office occupancy.”
Department for Transport statistics show patronage on Melbourne’s trains and trams has increased over the past six months but remains well below pre-pandemic levels. In July, average weekday patronage on metro trains was 58% of pre-Covid levels, while trams were at 67% and V/Line services at 55%.
Credit: Matt Golding
Figures show pedestrian numbers have increased in Melbourne’s CBD in the past six months, but there are half as many people walking as before COVID-19.
According to the City of Melbourne, the average number of pedestrians using the underpass at Flinders Street station between 6am and 10pm increased by 63% from 11,012 people in February to 17,247 in July.
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While office demand remains steady, Lowcock said the high amount of subletting in Melbourne compared to other cities was “some cause for concern” because it indicated tenants had too much unused space.
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