Empty office space and tired old high rises must be turned into vibrant vertical communities if the Sydney CBD is to continue to thrive.  

The Revaluing Sydney’s CBD report, released by Business NSW, has called for major changes to the amount of residential development allowed in our main CBD.  

There currently is more than twice as much space dedicated to carparking (11%) in the Sydney CBD as there is for residential living (5%), with office space taking up 35% of the city’s internal floorspace. 

Business NSW Executive Director David Harding said the Sydney CBD’s long-term decline could be prevented with an injection of residential and mixed-use development.  

“Ever since we invented the smart phone, the smart money has been hedging against totally office-bound CBDs,” Mr Harding said.  

“Limiting whole parts of our city to only offices and coffee shops is not only outdated, but also poor economics.  

“Buildings that work 24/7 are better for cities and better for people compared to buildings that only operate during office hours.”  

Under the proposed model advocated by Business NSW, modern high-rise buildings would have the flexibility to allow office, childcare, educational, school, gym, residential, hotel, and healthcare uses. 

This would be a concerted move away from the average CBD commercial building which has office space and retail.  

The report recommends the next NSW Government rezone major NSW CBDs (or portions within CBDs) to allow for mixed use and re-investment in stranded or devalued commercial stocks. 

It is also calling for floor space incentives for developers to include affordable housing, education, cultural/creative, childcare and other uses.  

“Collaborations between the public and private sector have a long history of creating vibrant communities,” Mr Harding said.  

 At a state-wide level, Business NSW’s We Mean Business election campaign platform is calling on the state government to:  

• Set a 30 per cent target for affordable housing on surplus government-owned land to support key workers to live closer to where they work. 
• Double the size of our CBDs’ permanent populations over the next 10 years. 
• Increase the supply of lower impact medium density housing like terrace housing, town housing, dual occupancy, and low-rise residential apartments across 
• NSW. 
• Follow the lead of New Zealand and rezone large cities like the Sydney metropolis to permit this type of medium-density housing. 

Mark Willers is a National Director of Commercial Valuations at Charter Keck Cramer, Australia’s largest independent professional property services firm.   

He said some office properties are seeing “reduced asset valuations”.  

“At the three-year anniversary of COVID we are seeing major CBD office occupancy rates remain significantly lower than pre-pandemic,” Mr Willers said.  

“Lower office occupancy causes problems not only for the office sector but has a direct flow on effect to retailers at the ground floor. 

“Business NSW’s Revaluing Sydney’s CBD report contains a number of key recommendations that are of relevance to local and state government, building owners and occupiers and property professionals, to improve CBD occupancy and resilience. 

“It is in the best interest of all stakeholders to work collaboratively to improve the vibrancy of Sydney CBD and give people a reason to come back.”