12-12 May 2022
MELBOURNE

5 KEY TAKEAWAYS | Has COVID Killed the City?

Sep 10, 2021 Policy & Trends

Nowhere has been more impacted by lockdowns and the shift to working from home than the nation's CBDs. Are we witnessing the death of the city as we know it or are we simply witnessing the next stage of urban evolution?

Our panel of senior built environment professionals discussed the future of our city post-COVID and what that means for Australia’s built environment sector. If you missed the live session or would simply like a recap, here are the key insights that came out of the session from our virtual 2021 Be Summit.

1. Flexibility is King

The pandemic has brought the concept of working from home to the forefront of every business’ agenda, and this means that providing flexibility and options to employees is the number one priority to retain and attract new talent.

The continued trend sees employees preferring the hybrid model with a mix of back to office days are 3-4 days a week and working from home on the other days. What does this mean? Larger businesses are handing back space, medium size businesses are still looking at critical mass, with smaller businesses looking at co-working spaces to suit their growth strategies, quotes Su Lim, Global Managing Director, FreeState.

Buildings need to have flexibility as businesses are struggling to manage their space with the dramatic shift in working patterns. Upgrading, refurbishing and repurposing building space to align with employee values is also key, such as sustainability, environmentally friendly measures, end of trip facilities and other amenities.

The panel agreed though that there is still a strong desire and an essential need for a central business area such as the CBD.

At the beginning of the pandemic, Balder Tol, General Manager – Australia & Southeast Asia, WeWork, predicted that the more prolonged and heavier the restrictions are, the more the urge there will be to head back to the office. This is backed by Craig Shute, Managing Director – VIC, JLL, citing research that showed 69% who were highly satisfied with their office space were keen to get back to the office.

“The role and function of city will shift, but ultimately will be positive for Melbourne.” Says Nicholas Reece, Deputy Lord Mayor, City of Melbourne.

2. Bringing the Vibe Back

Before the pandemic hit, the Melbourne CBD had an average of one million people daily, and this figure dramatically dropped by 90% as restrictions kicked in. However, in April 2021 when no restrictions were in place, the Comedy Festival ran and immediately saw a 90% increase in pedestrian footfall within the CBD. “Festivals and major events are going to be a key part of bringing the buzz back to the city.” Says Nicholas.

This shift of corporates reshuffling their office space needs also opens up the chance for businesses who don’t typically operate in the CBD to take up space, such as the arts sector. The more diverse types of businesses we can bring together on a micro level, will only bring more innovation and creativity.

3. Team Melbourne & Team Australia Effort

The reduction of temporary residents such as international student and tourists has had a big impact on the buzz of the Melbourne CBD. International education in particular brings $12 million a year to the economy and so bringing them back will be an absolute priority.

The US and UK have seen an increase in international students when they opened up, and Nicholas expects to see a similar trend with a flood of people coming back to Melbourne once the borders reopen, as the appetite for international education and travel is high after a period of low movement that almost the entire world has experienced.

Many major cities worldwide are investing in infrastructure during this time, but Craig also reminds us of the need to invest in what makes Melbourne so unique – the arts, culture, sports and events. This will not only attract internationals back to Melbourne, but also local Melburnians, regional Victorians and interstate visitors back to Melbourne.

“It’s going to take time, but it is certainly not the death of the city” says Craig.

4. Government’s Role

Encouraging people to get back into the CBD is a key role of the local government and Craig emphasised the need for Government departments to take the lead in its office occupancy in the CBD as a key accelerator for other organisations to follow.

Prior to the latest lockdowns in Melbourne, state offices were mandating employees to work from the office 3 days a week, this kind of initiative is crucial to support street level businesses such as cafes and restaurants in the CBD.

The Government support of events such as the Comedy Festival and other global and state-wide events, will not only attract more foot traffic but also drive a wider applications of CBD spaces such as hotels and build to rent, creating a CBD that offers more than just work opportunities, one where employment and leisure can co-exist.

5. It’s time to test

“The pandemic has exposed vulnerability that has already been part of the CBD, we need to appreciate the change and move forward on it. We aren’t seeing the death of the city, it’s an incredible opportunity to reignite” says Su.

Many people have put a hold on decision making in the past 18 months, but Su has started to see the desire to test and try new ideas emerge. Many organisations are beginning to engage with employees on the journey to transform the office space, finding out what employees want, testing different ways and learning from it. Those that are at the front, are those who are learning through the process of elimination.

Su concluded her discussion with the quote: “Move the conversation from productivity and dollars per square foot, to love per square foot.”

Balder touched on the digitisation of the WeWork space to provide its members with the technology to assist with this hybrid working model, video-conferencing technology to allow a room of people to have a seamless meeting with someone joining virtually, as an example. “Think of the workspace as a variable component rather than a fixed asset.” Says Balder in challenging organisations to think about flexibility at scale.

Watch the full discussion below!

Panelists

  • Nicholas Reece | Deputy Lord Mayor | City of Melbourne
  • Craig Shute | Managing Director – VIC | JLL
  • Su Lim | Global Managing Director | FreeState
  • Balder Tol | General Manager – Australia & Southeast Asia | WeWork
A big thank you to our speakers for being a part of the 2021 Be Summit virtual event! Subscribe now to receive upcoming event and industry news straight to your inbox.
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