Australian real estate firms buoyed by staff returning to office

[MELBOURNE] Office landlords in Australia’s two biggest cities stand to gain as workers return to the office more often than required, said Bloomberg Intelligence (BI).

More than 80 per cent of workers in Sydney and Melbourne are in the office at least three days a week, about five percentage points higher than mandated levels, based on a BI survey of 300 people in each city.

Key incentives for workers included opportunities for collaboration, and upgraded office amenities such as gyms and cafes. That is likely to buoy office-heavy real estate investment trusts including Dexus, Mirvac, GPT and Stockland, noted BI.

Landlords should also benefit from growth plans, with more companies in both cities looking to expand rather than downsize, the survey showed.

Of the 117 respondents from firms in Sydney that were expanding, 61 per cent cited business growth as the biggest driver.

Ken Foong, a BI analyst, wrote in the report: “Office settings, networking opportunities and amenities are driving attendance, while commuting and work-life balance concerns remain key deterrents. “More respondents in Melbourne – where there has been more leeway on return-to-office – prioritise flexible work than in Sydney.” 

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On Feb 18, Dexus chief executive officer Ross Du Vernet brushed off concerns that artificial technology would hurt real estate demand, and said that the market for premium office space remained strong.

He spoke after a swath of commercial property-related stocks fell on fears that artificial intelligence applications would weaken the demand for offices. BLOOMBERG