Panic engulfs leaders as vacant offices hulk across Melbourne

Melbourne’s CBD is in crisis as COVID-19 and the shift to working from home (WFH) has collapsed visitor numbers by an estimated 95%.

This has left office buildings empty and gutted surrounding businesses reliant on the people flow.

With business leaders and the Melbourne City Council concerned that WFH could become permanent, they have devised a plan to convert empty office space into apartments in a bid to revitalise the CBD:

Empty office towers would be turned into apartments in a dramatic effort to bolster Melbourne’s ailing CBD.

White Night-style projections would also be beamed on to heritage landmarks and big discounts offered to lure locals to multicultural precincts.

A high-powered committee tasked with revitalising the CBD will discuss the proposals this week…

Lord Mayor Sally Capp, who has formed the advisory board, said converting empty offices into residential buildings could revitalise the city as more people continued working from home and shopping online even when the pandemic was over…

“This global pandemic has knocked us for an economic six,’’ Cr Capp said…

“We can stimulate economic activity, create jobs, build more homes and boost the number of people in our city by finding ways to encourage retro-fitting of commercial buildings into residential accommodation.

“This will also ease the burden of the housing shortage…

Some workers aren’t expected to return with the commercial vacancy rate to hit at least 10 per cent.

This plan is akin to ‘robbing Peter to pay Paul’.

There is already a tidal wave of existing empty apartments and many more about to flood the market. Thus, turning empty offices into apartments will only worsen the oversupply, amid collapsing immigration.

Check out the ballooning residential rental vacancy rates across Melbourne (3000), Docklands (3008), and Southbank (3006):

Now add tens of thousands of additional apartments into the mix.

So, Melbourne’s CBD is faced with two scenarios: having empty office buildings or empty apartments.

On the bright side, diversifying economic activity away from the CBD, and breathing life into the suburbs and regional areas, is a big positive and exactly what Victoria needs.

Unconventional Economist
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