Hybrid working could redefine inner city real estate, say expert
One of Australia’s leading experts on urban planning has sounded a note of caution that CBDs may never return to their pre-COVID levels of activity.
Mike Day, partner at Hatch RobertsDay, has written a six point plan for government to consider as part of long-term planning around urban cores, with a focus on changing demographics and permanent shifts in building use that has occurred as a result of the pandemic.
It features ideas such as making office buildings more residential, closing roads into public spaces and recasting vacant lots as urban green spaces.
For brokers, this represents are potential paradigm shift in terms of where business happens, and the knock-on effect that may reshape the housing market in the next decades.
The tree changer effect, in which people moved away from CBD commuting locations and towards regional areas, was well underway before the pandemic and has been exacerbated by the enforced remote working environment.
The traditional inner city rental markets, built on twin pillars of international students and commuters, may also irrevocably change.
“This whole notion of ‘CBD’,” said Mike Day, partner at award-winning Australian urban planning and design practice Hatch RobertsDay. “I think we just need to change the term. It needs to be a central place that has a multitude of uses. It’s a misnomer now to call central cities Central Business District, because they’ve got to be much more than that.”
“If you’ve got the hybrid workplace, then most professionals in real estate will be remote work as part of the new work paradigm. Everything that we’re coming across is saying that the media office worker is going to work two or three days a week at home on average, which is going to have a radical shift in the central cities away from business districts.”
“In terms of the future of downtown real estate, we have to think differently to what we have in the past. There’s a lot of interest from CEOs and the real estate industry in maintaining the status quo of commercial real estate. But the reality is that there’s a new paradigm and the hybrid workplace is with us forever.”
“What we’re going to be looking at is suburban spoke offices, a series of many workplaces that mirror what is in the central cities, but in the growth areas. That’ll be beneficial for people living there because of the commuting time. During COVID, they’ve been able to spend time with their families, not to mention the cost of commuting.”
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