Companies are upgrading to more luxurious office buildings to attract desperately needed staff, leaving owners of lesser quality buildings scrambling as the number of vacant city offices continues to grow rachael_dexter
Melbourne companies are upgrading to more luxurious office buildings to attract desperately needed staff, leaving owners of lesser quality buildings scrambling to improve their properties to stay viable.
July’s vacancy rate of 12.9 per cent was up from 10.4 per cent a year earlier, and 5.8 per cent pre-pandemic in January 2020. New offices on Flinders, Collins and Lonsdale streets are also nearing completion and will open in the next 18 months, so the lobby group does not expect vacancy rates to start falling until 2024.
The demand for luxury buildings is forcing improvements to lower-tier office spaces. One such building is at 136 Exhibition Street, where a recent makeover was done so that its 15 different tenants – including the Property Council – would stay. “It’s like the residential market these days; if it’s not dressed up, it’s going to struggle,” Martinez said.
The increase in empty offices continued even though the number of people returning to work in city offices stalled. According to the lobby group’s most recent data, office occupancy stalled at 49 per cent in June.
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