In their latest Statement on Monetary Policy - August 2021 report, the Reserve Bank of Australia explores the impact of Covid-19 on the commercial property market highlighting key changes in remote working, office occupancy & supply.
Highlights include:
"Office vacancy rates have risen sharply in Australia since the onset of the pandemic. This has been most pronounced in Sydney and Melbourne, where recommendations that employees work from home were in place for longer and large volumes of office space have arrived on the market since the pandemic began".
"A distinctive feature of the pandemic has been the increased use of remote working arrangements. The ABS Business Conditions and Sentiments survey, released in April 2021, indicated that the share of businesses with remote working arrangements had increased notably following the onset of the pandemic and had been largely maintained despite activity restrictions being progressively unwound since mid 2020".
"Office occupancy rates have generally increased in line with decreasing social restrictions and transmission risk. However, occupancy rates have remained 10–30 per cent below pre-pandemic levels even in cities that have had little transmission of COVID-19 since the initial phase of the pandemic, due to the continued higher use of remote working arrangements".
"Despite most large firms planning to adopt a hybrid model of work, around half of surveyed liaison contacts have no intention of changing the amount of office space they lease. One reason for this is that the amount of office space required depends on ‘peak’ usage, rather than average usage across the week. Other reasons noted by firms include the need to accommodate larger collaborative work spaces, social distancing and future growth in headcount".
"The COVID-19 pandemic has accelerated the shift toward e-commerce as consumers attempted to maximise social distancing and comply with lockdown measures. As a result, tenant take-up of industrial property such as logistics and warehouse space in the year to the March quarter 2021 was around 45 per cent higher than its 10-year average".
View the full report here.
