How do we turn CBDs into central experience districts?

How do we turn CBDs into central experience districts?

In brief

• The new ‘hybrid’ work model has implications for businesses, office landlords and the shape of our CBDs.
• Adapting to the 'new normal' means looking beyond individual buildings to the bigger picture.
• EY and the Property Council have formulated six ideas to restart our CBDs.

Most Australians expect to spend less time in the office, post-pandemic. In fact, recent EY research suggests the average CBD worker will spend just 3.3 days a week in the office. What does this mean for the future of our CBDs? This is a big question – one EY and the Property Council set out to answer in our new report, Reimagining our economic powerhouses: How to turn CBDs into central experience districts. CBDs are big engine rooms of Australia’s economy. Our four biggest CBDs in Sydney, Melbourne, Brisbane and Perth generate 15% of Australia’s economic activity – more than any single industry. CBDs have been keys to unlocking national productivity, innovation and investment for decades. 

They have also been cultural connectors and magnets for tourism. Our most iconic architecture, our leading museums and art galleries, and our best shopping experiences are all waiting to be discovered in our CBDs.

But the COVID-19 pandemic has knocked our CBDs off their axes, shifting activity to the suburbs. According to office occupancy data from the Property Council – which tracks people sitting at their desks – just 24% of Melbourne CBD employees worked from their office in February, compared with 94% pre-pandemic. Sydney’s CBD fared a little better at 48%, but far below the 94% before COVID-19 crashed into our world.

At the same time, an acceleration of online commerce is changing the way people shop and advanced technology has also made it even easier for people to socialise virtually.

Full-time remote working is not a permanent preference, but people are looking for more flexibility in their working week.

How do we coordinate the working week across remote teams? How do we nurture corporate culture when people are working everywhere? How do we manage the practical challenges of traffic congestion and flow through buildings? And how do we create and curate experiences that attract people to the CBD to spend, play and stay?

These are some of the big questions that business and city leaders must now grapple with.

Australia’s property industry is investing in creative solutions to reconfigure space, embrace smart building technology and create dynamic places where people want to be. But we must also look beyond our individual buildings to the bigger picture.

Six ideas to restart our CBDs

EY  research found 82% of Australians expect their CBD to evolve to keep meeting the needs of workers, residents and visitors. But what might this next evolution look like?

Respondents to EY  survey told us they want their CBD to be a destination that offers more than just workplaces. They are looking for a variety of experiences – relaxation and dining, fashion and culture. Ultimately, people want their CBD to be a place that meets their essential human desire to connect.

With the help of 26 ‘big thinkers’, responses from 600 CBD users, insights from a raft of focus groups and roundtables, EY and the Property Council have curated all the best ideas across six themes:

1. Create central experience districts: EY found 62% of Australians expect to favour their local precincts over the CBD once the pandemic subsides. Luring people back will require a combination of ‘energising experiences’ and policies that support the 24-hour CBD, remove restrictive taxes and welcome back international students.
2. Reimagine the workplace: Marble foyers and sweeping city views will not be enough to entice people back to the office. The idea of a workplace has moved from shiny headquarters in the city to any place, whether that’s the kitchen table or the local café. Creating healthy and productive spaces for hybrid work will require new skills, innovative design, a customer-centric mindset and smart technology.
3. Redefine quality: Quality assets now mean more than the building itself. Quality is also defined by the health, wellbeing and technology features, and sustainability ratings that underpin the building. Owners of lower tier stock can rebalance the scales by outperforming as quality landlords. But there will also be a portion of stock that must be reimagined.
4. Green it up: A massive 86% of Australians surveyed by EY say more green and open space would attract them to the CBD. This means more than parks for picnics. Think healthy, sustainable workplaces, laneways peppered with pot plants, sky parks and rooftop bars that are garden oases.
5. Accelerate the move to future transport: EY found improvements to public transport would encourage people to spend more time in the CBD, with 44% citing more frequent, less crowded public transport as the key to their return. Re-prioritising road space for active transport and future mobility options can enhance safety, encourage healthy and active transport, and support more vibrant street frontages.
6. Amplify Brand Australia: Relative success in handling the pandemic could make Brand Australia a magnet for tourism, attract new knowledge workers and business capital. Rebooting population growth by opening international borders to students and skilled migrants will help us dial up the ‘experience’ of our urban centres.