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The death of the CBD? How are central business districts going to change?

Dec 15, 2020 | Advisors

The ‘death’ of the CBD is a serious and rather interesting possibility in the era of COVID-19. We’re seeing it firsthand. How many of you were once working full time, day in and day out from the CBD of your city or perhaps an office block? Quite the handful.

When COVID-19 landed in Australia, we were tentative at first. Would this one blow over like SARS or the swine flu? Would it actually impact our daily lives in any material way? We now have our answer.

Very swiftly we saw firms and practices around our capital cities react in decisive ways. Giants like KPMG and Deloitte sent their staff home indefinitely. Although not the first to do so, the signal was strong and from there, the writing was on the wall for all to see.

To ensure their employee’s health was not compromised, plans were drawn up for a remote workforce. Policies were put in place, rolling government advice was adhered to and a mass exodus of our CBD’s and offices began.

The towers fall silent

Towering vertical blocks of professionals vanished from our central business districts in a matter of weeks.

Once thriving skyscrapers, packed to the gills with financial professionals, accountants and advisors of all ilk, lay dormant but for a scarce skeleton crew.

Trains and buses emptied. Streetscapes were swept barren. Cafes were silent.

In almost no time at all, the new era was upon us and we began to adapt.

The adaption

Many of us were surprised by how easily the majority of professionals could work remotely. Then again, many of us always knew we could, but that managers were simply not convinced. Well, that’s all changed.

Roles which would have never been offered as remote have now been performing highly with no office contact whatsoever. We always knew certain roles were primed for digital nomads, yet it’s surprising how well almost any role can be adapted to the new contact free era.

Technology drives adaptation

Many had never heard of Zoom, Teams, Asana or Slack before now. If you had, you probably never placed so much importance on it.

With the surge of WFH, came a matching tsunami of technology which has allowed us to forgo offices and CBD’s in lieu of the loungeroom. As this technology matures and we become more comfortable with it, rest assured that the reasons to re-enter full time office work will fade even further.

CBD’s begin to morph

It’s a well known fact at this point that many large firms and businesses do not envision a future that looks like it once was. We hear reports of firms and companies saying they do not see a five day in-office week returning any time soon.

It’s no secret that office leases are being reconsidered and scaled back.

The commercial property sector is reeling from a lack of present workforces and across the country, spaces are being rethought.

In Sydney’s CBD, for example, new licenses for alfresco dining on the streets are being rolled out and new ways of thinking about the use of CBD spaces are being proposed.

Entertainment, dining, social and creative spaces are likely to re-enter dormant CBD’s and the wind back of commercial spaces will echo for some time.

So while a cityscape of suits and office cubicles may continue to fade, there will inevitably rise a new age of CBD use to entice people back to their city centres.

Will we go back?

It’s highly likely that a rebound will occur and we’re seeing that already. Many companies have begun re-introducing people back into offices and perhaps many of us will return full time.

It’s hard, though, not to understate how well people have adapted and how strong new habits have become. There is a difficult argument to make for proposing a five day week to a professional who has performed perfectly from home, and wishes to continue doing so.

While it’s too early to herald the death knell of the CBD, it’s difficult to avoid the realisation that full time business-oriented commercial spaces and CBD’s will ever return to the form we once knew them.

New uses will crop up, office spaces will retract and the once popular idea that people will not perform well when working remotely will continue to crumble.

To find out more about APS software, visit www.aps-software.com.

APS is a division of Reckon, an ASX listed company. We develop the software used by the best Accounting Firms in Australia and New Zealand to run their business’ and advise their clients.