The commercial real estate firm’s Pacific head of research Sameer Chopra says the return to office began to pick up steam in the three months to October 2023, with data showing peak day visitation at 83 per cent of pre-pandemic levels in Sydney and “almost close to 100 per cent” in Perth.

“I expect that peak day CBD visitation or office attendance will be at similar levels to 2019, and I think we’ll see it pretty soon,” Mr Chopra said on the Talking Property podcast with CBRE Pacific chief executive Phil Rowland earlier this month.

“It’s been encouraging … just to see the CBDs are very busy in January. You know, people seem to have really come back.”

Mr Rowland agreed that the “general trajectory of people coming back to CBDs and the general trajectory of people returning to office is positive and there’s no reason to see that slowing”.

“And I think we’ve clearly seen a lot of organisations just continue to reinforce the importance of being together, having the in-person experiences,” he said.

“The way that office precincts are being curated is really helping in that regard. So, whilst hybrid work is something that is here to stay, I don’t necessarily see that as being the demise of office or necessarily we see visitation come back.”

CBRE said in its 2024 market outlook report that average Australian CBD visitation reached 71 per cent of 2019 levels in the third quarter of last year, well above the 54 per cent in the prior three months.

Melbourne still lags behind Sydney, however, with peak day office visitation at 63 per cent in the third quarter of last year and an average of 56 per cent.

Brisbane’s average was 75 per cent and 79 per cent peak, while Adelaide saw 85 per cent average and 88 per cent peak.

“National office attendance remains highest mid-work week,” the report said.

“Many large corporations continue to set clearer return-to-office work policies.”

In an article on Monday, CBRE outlined a number of factors that were bringing workers back to the office.

“Environmental features like natural light and better air quality now rank highly, alongside dedicated spaces for individual online meetings and focused work,” the analysis said.

“Attracting gen Z and millennials into the office needs even more creativity from building occupiers, with considerations for parking, food and beverage options, and apps which inform when colleagues will be in the office.”

Jenny Liu, director of workplace consulting at CBRE, said “great experiences, social interaction and human connection are going to draw more workers into offices”.

“Workplace experience is key to enticing people back to the office and these strategies fall under the key categories of people, place and technology,” she said.

“A workplace experience isn’t just environment, cool furniture and tech anymore. It’s the culture, ways of working, leadership, and how vibrancy is created. This is crucial because people are your most valuable asset, not your real estate footprint and office space.”

CBRE research manager Thomas Biglands added, “It’s important that you achieve a critical mass of visitation so that employees come in and feel as though the office is vibrant and full. It’s also important that enough co-workers and managers are in the office so that they see value from coming in. It defeats the purpose if workers show up to the office and end up being on Zoom calls all day.”

Experts have predicted office attendance — which has become a major industrial relations battleground in the aftermath of the pandemic — will increase this year as employers get the upper hand amid rising unemployment.

“I believe most employers will be pushing for greater office attendance in 2024,” SQM Research founder Louis Christopher told The Australian Financial Review last month. “With a forecast rise in unemployment, businesses will have the upper hand in negotiations with their employees next year.”

Australia’s unemployment rate rose to a two-year high of 4.1 per cent in January from 3.9 per cent the prior month, with an extra 22,000 people out of work.

There were now 600,600 people unemployed across the country compared to the 578,300 Aussies were out of work in December, according to the Australian Bureau of Statistics (ABS).

Oxford Economics Australia head of macroeconomic forecasting Sean Langcake said the unemployment rate will likely increase as the year progresses.

“We expect the unemployment rate will trend higher over 2024, reaching a peak of 4.5 per cent,” Mr Langcake said. “But with the unemployment rate reaching 4.1 per cent in January, this cycle appears to be running ahead of schedule. The slackening of the labour market is well and truly underway.”

A recent survey found more than one-third of large Australian employers were planning to reduce the pay of staff who continue to work from home over the next few years.

The report last year by law firm Herbert Smith Freehills (HSF) surveyed 500 senior managers at companies with more than 1000 employees around the world — including 100 respondents in Australia — and found employers were using a mix of “sticks and carrots” to recall workers as they seek to wind back Covid-era work-from-home policies.

“In Australia, we’re seeing a range of approaches for getting people back in the office,” said HSF Melbourne partner Natalie Gaspar.

“Some employers are still doing soft encouragement — such as team lunches on Wednesdays, team drinks, or extra-curricular activities on certain days. Some are using more of a direct approach — you must be in the office on Wednesday, Thursday and Friday, for example. There’s only a handful of organisations mandating a full return to the workplace.”

In November, ANZ strongly hinted to staff that their pay packets could take a hit if they fail to meet the “behavioural expectation” of showing up to the office at least 50 per cent of the time.

The bank in 2022 set a target for staff to spend half their time in the office because “high-performing teams need regular in-person contact with each other”.

Speaking to 3AW radio last July, ANZ chief executive Shayne Elliott admitted that fewer than half his staff came into the office “on a good day”.

An estimated 60 per cent of workers cannot do their job from home because they need to be physically present to perform their duties, such as medical staff and tradies.

But the Covid pandemic showed working from home was doable for desk-bound workers and had many benefits — and once they got a taste, the popular perk has proven hard to claw back.

Many companies, accepting hybrid working is here to stay, have set similar in-office requirements of 50 to 60 per cent — but the push for people to be physically present with their colleagues is only expected to increase.

Angela Ferguson, founder of workplace strategy and design company Futurespace, told NCA NewsWire last month more leaders were expecting a full-time return to the office in 2024.

But she said it would be important to motivate, not mandate it with creative in-office incentives and renovations.

“Leaders should look at why they want people in the office,” she said.

“Many leaders are asking staff to come in two or three days a week, which is not an unreasonable request. However, we often find in our engagement with organisations that there is a disconnect or a gap between what staff are seeking and what leadership are seeking in terms of days in the office.”

She added, “It’s not only about productivity, it’s also about mental and social wellbeing. No matter how introverted people are, as humans we all need some social connection and the workplace is a great environment to foster that.”

Last August, Bendigo Bank managing director Marnie Baker told staff she was ordering them back to the office for their own “mental health” while admitting “it’s not about productivity”.

“I don’t doubt that you can be productive (at home),” she said in video obtained by news.com.au. “This is about our own mental health, this is about the fact that we are a relationship bank and we talk about our relationships with our customers and communities.”

One factor working against the return-to-office push, however, is the cost of leasing office space — and the financial benefits for a business if it downsizes.

“Many companies will likely give up space when their leases expire, as they accept that balanced work-from-home is here to stay and they use it as a way to save rental costs,” AMP head of investment strategy and chief economist Dr Shane Oliver told The Australian Financial Review in January.

frank.chung@news.com.au

— with NCA NewsWire