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Is Docklands Outperforming the Eastern Core in their Return to Work?

We compare the Docklands and Eastern Core precincts in their return to the office, relative to the CBD average

To help understand the impact of an office building's location on return to work, we analysed and compared the Worker Activity Indexes ("WAI") of the PCA office precincts within Melbourne.

The WAI measures the level of identified worker visits to an individual office building ("activity") as a proportion of the total Net Lettable Area ("NLA") of the building, using de-identified and anonymised mobile phone data and's proprietary algorithms. The WAI is a new measure of demand for the office sector, allowing individual office buildings to be compared against each other irrespective of their size or vacancy levels, to determine which buildings are attracting workers back to the office, and which buildings are not.

Buildings can also be group together to derive benchmarks such as the Melbourne CBD Average and also to carry out analysis like this, whereby the WAI's of each office building within a PCA Office Precinct have been grouped together.

Worker Activity Index (WAI) of Docklands and the Eastern Core compared with the CBD average

As at the end of October 2022, Docklands had a WAI of 12.1, which surprisingly appeared to be outperforming the Eastern Core (WAI of 10.4) and the Melbourne CBD average (WAI of 11). This was contrary to the general perception within the property industry, being that workers hadn't been returning to Docklands as strongly as other precincts.

To delve a little deeper, we then compared the current WAIs of the Melbourne PCA Office Precincts, relative to their "Pre-Covid" peaks in WAI, as at the week ending 29th November 2019.

The "Pre-Covid" peak for Docklands was a WAI 30.2. This was much higher than the Eastern Core (WAI of 22.9) and the Melbourne CBD (WAI of 22.2). A likely explanation of this is that many Docklands office buildings have large, campus style floor plates that attract large space occupiers such as banks, financial institutions, professional services firms, engineers, government and utility companies. Many of these companies adopted agile and activity based working plus high density fitouts, meaning comparatively more workers within an office building and therefore greater "worker activity".

Worker Activity Index (WAI) of Docklands, the Eastern Core and the CBD average comparing late 2019 with late 2022.

So although Docklands had a higher WAI than Eastern Core as at week ending 28 October 2022, the Docklands WAI of 12.1 is 40% of its Pre-Covid peak of 30.2. Comparatively, the Eastern Core is sitting at 45% of its pre-COVID level. On this basis, the Eastern Core is outperforming the Docklands with respect to worker activity.

The Melbourne CBD average is tracking at 50% of Pre-COVID levels. If you'd like to know which PCA Office Precincts are underpinning this, or for more insight on individual office buildings in Melbourne or Sydney, contact us here.

Callan Cameron