In Victoria, public servants are expected to work from the office at least three days a week under a “flexible work policy” which has been in place since March 2021.

‘This is a game-changer for our CBDs and local centres. More workers mean more life, more investment, and more business for our cities.’

Katie Stevenson, executive director, Property Council NSW

Property Council of Australia NSW executive director Katie Stevenson called the move a “game changer for our CBDs and local centres”.

“More workers mean more life, more investment, and more business for our cities,” she said.

“Our CBDs are the heartbeat of the economy, powering jobs, investment, and thousands of businesses that rely on bustling commercial centres. It’s great to see the NSW government stepping up and leading the way by getting public servants back to their desks.”

Office landlords are also encouraging the return to the office.

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Dexus, Australia’s largest office owner, said flexible working was an “embedded practice in the business sector”, adding that the majority of staff were in the office most days of the week.

Dexus executive general manager, office, Andy Collins, said small- to medium-sized customers had been leading the return to the office and were seeing flow-on benefits in productivity and engagement.

“The NSW property sector has thrown its support behind the premier’s bold move, saying it’s precisely what our cities need to thrive,” Stevenson said.

“We need vibrant commercial centres every day of the week, and the Property Council has been consistent with its calls for government action to make public servants work from work.”

Stevenson said nurses, teachers and police could not work from home, so there was no good reason why other public sector workers should work under different conditions almost three years after lockdowns.

“Sydney CBD vacancy rates are at 11.6 per cent, which is still historically high. This directive is the shot in the arm we need to kickstart a vibrant, thriving city, ready for fresh investment and growth,” she said.

Mirvac chief executive Campbell Hannan, who oversees a large premium office portfolio in Melbourne and Sydney, also sees a return to the office as a major positive.

“It gives the cities a vibe, and it helps the retailers, cafes and other outlets to flourish,” Hannan said.

Meanwhile, CBRE’s director of office leasing, Mark Martin, who operates in the heartland of Western Sydney, expects landlords, cafes, and gym operators will breathe a sigh of relief.

“The NSW government directive to work primarily from ‘an approved workplace’ ... will have significant benefits”, Martin said.

“Occupying significant floor space across many Parramatta buildings, the government workforce will generate notable vibrancy, with more people in cafes, restaurants, general food and beverage [outlets], retail and lifestyle amenities.”

In the latest Property Council Office Market report, vacancy rates in Sydney CBD vacancy rates fell from 12.2 per cent to 11.6 per cent, and in Melbourne, it was 16.4 per cent. Parramatta’s near-20 per cent figure is offset by numerous new buildings opening in the past few years.

Knight Frank chief economist Ben Burston said the public sector was a key driver of office demand, and the updated government advice provided reassurance that a strong office presence from the public sector in Sydney would be maintained, particularly in the CBD and Parramatta.

“The NSW advice contrasts with more flexible workplace arrangements for public sector employees in Victoria and Canberra, where there is more uncertainty over the long-term impact of changing workplace strategies from public-sector occupiers,” he said.

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