What the CBD Could Look Like In A Post-Pandemic World

As we start to imagine what Melbourne’s CBD will look like in a post pandemic world, coupled with changing population centres, it must be said that the CBD is likely in for a big change. 

The CBD has been a virtual ghost town for many months and, even as offices reopen, it’s suggested that a significant proportion of company staff will continue working from home after COVID-19 restrictions have fully eased. 

Millennials are driving this interest in continued working from home.There are a number of factors driving this trend. Firstly, millennials are demanding a work life balance that wasn’t (or isn’t) part of their parents’ working life. Further, given concerns about climate change, millennials are looking to limit their travel to reduce their carbon footprint and impact on the environment. 

With significant population growth in Melbourne’s west, those that do come into the CBD may use Southern Cross Station as their city hub rather than Flinders St which would have been common in the past. 

As CBD based corporations look to rationalise their corporate office space, potentially needing less to account for staff working from home more often, they may look to the west of the CBD for space to rent, a significant shift from where many head offices are currently located. This could also spur activity around the Docklands.

Whilst working from home is not new, with pre-pandemic levels seeing approximately 5% of the workforce being home-based, there is some concern that a level of remote working that is too high could lead to issues with public transport in its current form. 

Many inner city councils are looking at creating enclosed communities. For example, Moonee Valley just north of the CBD is pushing 20 minute neighbourhoods where residents can find everything they need for work, education and “play” within 20 minutes of home. This may discourage residents from entering the CBD as often. If they are looking to work away from home, this may lead to the rise of local shared office spaces as many corporations look to diversify their CBD office space. 

At the other end of the spectrum, many are looking to regional cities and towns for both a tree change and housing affordability. The pandemic has seen millennials understand that working from home can be productive and that they can choose the community they want to live in – travelling into the CBD only occasionally.  

With less workers travelling into the CBD, and international students still stuck overseas, corporate offices are not the only areas that will struggle. With corporate office spaces, it’s likely that the premium addresses, for example Collins St, will continue to flourish, but there could be space on the fringes of the CBD that sits empty for extended periods of time. 

With less patronage in the CBD there will also be an impact on hospitality and retail businesses. These businesses will continue to flourish, and face massive threats, unless Governments of all levels offer incentives to drive traffic into the city.

The Victorian Government has offered vouchers to encourage travel in regional Victoria. Melbourne City Council has recently announced a scheme to encourage patronage in CBD venues. 

Many in Council and other industry groups would like to see the Government do more to get workers back in offices more regularly and also get international students back studying at our institutions. 

Without this intervention, the CBD could continue to look very different. It’s very viability could be under threat. 

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