The Adelaide CBD is moving towards normal as office workers return and bring some more bustle to one of Australia’s smaller capital cities.
Property industry experts also say Adelaide should thrive over the next few years as “lifestyle” considerations shift higher up people’s priority list and the city is eyed as a preferred destination for those who may have grown up in South Australia, shifted interstate or overseas, and want to return.
Regular research conducted by the Property Council of Australia shows that while Adelaide CBD offices are heading towards normal occupancy, they aren’t there yet.
South Australia had a relatively open economy in 2020 and the early stages of 2021, aside from the infamous three-day lockdown in November when the suburban Woodville Pizza Bar was in the spotlight and momentary panic set in among health authorities.
Waste management group Cleanaway has a unique perspective on where the city is up to. As Australia’s biggest company in the sector, it has more than 5000 trucks on the road around the nation, collecting rubbish and recycling from a broad spectrum of businesses, office complexes and hospitality venues.
Cleanaway chief operating officer Brendan Gill sums it up succinctly: “Adelaide and Perth are pretty much fully back to normal.”
Property Council research shows 71 per cent of workers had returned to commercial office buildings in Adelaide’s CBD in March, up from 56 per cent in August last year.
Behind the occupancy numbers
But the executive director of the Property Council in South Australia, Daniel Gannon, says some perspective is required.
Occupancy was 86 per cent before COVID-19, which shows the work-from-home shift was already under way before the pandemic caused an exodus from office towers last year, Gannon says.
“We’re at a critical juncture in history where a lot of employers are allowing their staff to work remotely,” he says.
The structural shift to work-from-home has also opened up more opportunities for people to think about where they could be based.
SA Premier Steven Marshall repeatedly reinforces the lifestyle benefits of Adelaide and the high-tech industries it is attracting. The Lot Fourteen precinct on the former Royal Adelaide Hospital site on Adelaide’s stately North Terrace is buzzing with activity, and more is planned.
High-tech organisations including Amazon, the Australian Space Agency, the SmartSat Co-operative Research Centre, MIT bigdata Living Lab, the Australian Institute of Machine Learning, and the Australian Cyber Collaboration Centre are already calling Lot Fourteen home. Property investment platform Quintessential Equity will develop its biggest project yet, a $400 million office building, within the precinct.
Quintessential Equity’s executive chairman, Shane Quinn, refers to the precinct as a “mini Silicon Valley”. Postgraduate education will be embedded within organisations to try to accelerate technological change and the vital skills required for it.
“We don’t know what the jobs of the future are, but we know they’re coming,” he says.
The growth industries of the future will bring with them talented people, which is where Adelaide is in a strong position. The lure of being able to live in a leafy, cultured city where real estate prices are often half that of similar properties in Sydney or Melbourne is strong.
Gannon says the appeal of being able to undertake some work remotely will widen the field and result in more people considering the benefits of basing themselves in South Australia.
“So if you can work wherever you like, that means you can live anywhere – and if you can live anywhere, then South Australia as a place to call home is a no-brainer,” he says.
“South Australia has a median house price that starts with a ‘5′ instead of ending in ‘million’, and that is an incredible competitive advantage.”
The state’s strong response to the COVID-19 pandemic had also helped put it in the spotlight. By April 7, there had been only 662 cases of COVID-19 reported, most of them in returned overseas travellers, and four deaths.
Even though work-from-home has been popular, Gannon thinks there will be a gradual return of more office workers into the Adelaide CBD. Building a culture is difficult over the long-term via Microsoft Teams and Zoom meetings, he says.
“For most businesses, Zoom meetings don’t deliver creativity or collaboration like the physical workplace,” he says.
Tempting workers back
Company owners and landlords are working hard to make their workplaces as appealing as possible.
“In the short term, the onus is on business and building owners to create the right physical environment in order to entice people back into the workplace,” Gannon says.
“However, with the passage of time and as technology like Microsoft Teams and Zoom become less appealing, CBDs will return to pre-pandemic levels.”
Small business owners and cafe operators hope he is right.
“Across the country, our CBD economies are big drivers of economic activity and that supports thousands of jobs,” Gannon says.
“If it doesn’t, there will be a massive detrimental impact on small business owners as a result of fewer people buying coffee, takeaway sandwiches and general goods in the CBD.”
He says every business that occupies floor space in the CBD should aim to lift staff numbers back towards maximum.
Changing work patterns and a preference for flexibility is having a profound effect, and many employees like the sound of a “hybrid” model, where they work three or four days in the office and one or two at home.
A study for the Property Council by EY and research firm Sweeney of more than 600 CBD users found 70 per cent of city workers wanted to continue to work flexibly. Workers nominated three days in the city as their preference, with Thursday the most popular day, and Monday and Friday the least.
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