The Covid lockdowns Melbourne has experienced over the last year have been the longest and most restrictive in the country. Melbourne’s CBD has suffered as a result and this is apparent to anybody who has managed to visit between lockdowns.

Visitors can clearly see the prominence of vacant shopfronts in the city however probably less obvious is how much office space is now vacant. The Urban Developer has identified that by July, 96,635 square metres less Melbourne office space was occupied compared to the start of the year. Office space occupancy rose - albeit modestly - in all other capital cities (total 85,000 square metres – almost as much as Melbourne office occupancy fell).

Although the article stated that real estate agents are hopeful that the tide of demand will soon turn, a recent Domain article tells a different story, noting that numbers of Melbourne residents have sought a “tree change” or “sea change” to the outer suburbs or beyond as their requirement to come into the city office every day has now been permanently shifted to at least some remote working every week. For many workers, living close to the physical workplace is now no longer as important. This indicates a lasting shift in business mindsets about the value of having an office premises to accommodate all workers, all the time.

What will this mean for the Melbourne CBD? One likelihood is that the lasting change to workplace practices means we will begin to see planning permit applications for conversions from office to apartments or some other adaptive reuse. Otherwise, to keep business booming in the CBD, there may have to be enticing incentives in place to bring workers back in the same numbers as before.


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