“The sellers building the strongest businesses today are those investing in long-term, local relationships. You become part of people’s weekly rhythm when you are their go-to barista, baker or neighbourhood favourite,” said Colin Birney, Square’s head of business development in Australia.
The insights are broadly backed by movement data and business groups, which have said that rather than CBDs becoming ghost towns, the figures reflect the changing ways Australians are spending and engaging with their cities.
‘We continue to see strong movement into the city, particularly in the evenings and across the weekends.’
Scott Veenker, Committee for Melbourne chief executive.
Greater work from home flexibility has been identified as one key driver of consumer activity out of CBDs and towards suburban hubs.
This week, Elliott Rusanow, chief executive of Westfield operator Scentre Group, told The Australian Financial Review’s property summit that working from home had been a boon for shopping centres.
“When people say they’re working from home, they’re probably also doing other things because they might be productive for part of their time at home,” the Financial Review reported him as saying.
“People don’t want to stay at home all day long, and for some reason … they don’t want to go to the office. So if they don’t want to go to the office, guess where they’re going? It’s one of our places, and we’ve seen the benefit of that.”
Flexible work means more workers are visiting shopping centres during the day.Credit: Dominic Lorrimer
The national CBD office vacancy rate increased slightly from 13.7 to 14.3 per cent in the six months to July, Property Council of Australia data shows, in part due to an increase in supply of premium modern office spaces, which are in demand from businesses looking to boost office attendance.
Melbourne had the nation’s highest CBD office vacancy rate at 17.9 per cent, with Sydney’s at 13.7 per cent.
Adding to this are the findings of an economic insights report from the City of Sydney, covering the 12 months to April, which found that while there was a small rise in average weekly spending in the council area, there was a considerable drop-off in how much young people – especially those in the early stages of their careers – were spending in urban areas.
It found 25- to 34-year-olds, the largest contributors to the city’s economy at 25 per cent, spent 2.2 per cent less on average each month in the year to April, down for the second straight year. Spending by 18- to 24-year-olds, and 35- to 44-year-olds, has also been declining over the past two years. This contrasted with those over 55 increasing their average spends within Sydney.
Matt Levinson, head of corporate affairs and culture policy at the Committee for Sydney, backed up this theory, saying city-shaping changes such as the extension of the Metro network and higher density development outside the CBD had allowed suburbs to flourish.
“We’ve always celebrated our local faves, and that’s only increased since COVID, but what’s interesting now is the way FOMO’s inspiring us to check out different parts of the city,” Levinson said. “Instead of heading into the city, more of us are checking out local faves in other parts of Sydney, whether it’s Harris Park’s curry houses or the brisket sandwiches in Crows Nest,” he said.
CBDs, however, are still attracting crowds, albeit in different ways.