How COVID all but killed the Australian CBD
<p>The <a href="https://www.tandfonline.com/doi/full/10.1080/02723638.2015.1075318">central business district</a> has historically been the beating heart of metropolitan regions across Australia. The polished glass and steel high-rise offices, hotels and apartment complexes stand as monuments to <a href="https://journals.sagepub.com/doi/abs/10.1068/a3720">architectural</a>, construction, engineering and, of course, economic success.</p>
<p>CBD-based workers and visitors, plus <a href="https://www.tandfonline.com/doi/full/10.1080/00049182.2016.1220901">increasing residential densities</a>, have played a major role in sustaining the diversity and vibrancy of retailing in our capital cities. The COVID-19 pandemic has changed that. The impacts on CBDs across Australia’s capital cities have been devastating.</p>
<p>We explore these impacts city by city in this article. In a second article, we consider the implications of the loss of CBD activity for our cities.</p>
<p>In urban planning terms, CBDs have long stood at the apex of the <a href="https://www.dplh.wa.gov.au/getmedia/4386f155-219a-405f-97b7-e012e4963683/SPP-4-2activity_centres_policy_2_">activity centre hierarchy</a>. They are key nodes of employment and consumption for the services, hospitality and retail sectors. Most CBD workers and shoppers travel from middle and outer suburbs.</p>
<p>Globally, however, the retail sector has experienced profound changes over the past 5-10 years. The result is so-called <a href="https://www.washingtonpost.com/business/2019/11/22/malls-are-dying-only-these-ones-have-figured-out-secrets-success-internet-age/">“dead malls” in the US</a> and the <a href="https://link.springer.com/book/10.1057%2F978-1-137-52153-8">“death” of the high street</a> in the UK.</p>
<p>In Australia, CBD-based retailing has been on life support for most of 2020. At times Australian CBDs, especially Melbourne, and some shopping centres have resembled <a href="https://thewest.com.au/news/coronavirus/coronavirus-crisis-perth-city-and-shopping-centres-a-ghost-town-ng-b881508613z">ghost towns</a>.</p>
<p><strong>A hollowed-out CBD</strong></p>
<p>Data from <a href="https://www.google.com/covid19/mobility/data_documentation.html?hl=en">Google’s Community Mobility Reports</a> provide insights into visitor trends to retail/recreation places at a range of scales – national, state and local government area. The Google data show percentage changes in visitor numbers from a <a href="https://support.google.com/covid19-mobility/answer/9824897?hl=en">baseline day</a>: “the median value from the 5-week period Jan 3 - Feb 6, 2020”.</p>
<p>For the two weeks from February 15-29, average visitor numbers to retail/recreation places across all major capital cities were above their baselines. Adelaide led the way with numbers up by 23.2%. Melbourne (8.5%) and Sydney (5.8%) were performing relatively well. Brisbane’s footfall was up by only 0.7%; below the national average of 1.3%.</p>
<p>Adelaide’s numbers were 56% and 50% above the city baseline on February 29 and March 7. Two factors explain this: the Adelaide Festival was on; and March 6-9 was a long weekend public holiday in South Australia.</p>
<p>The arrival of COVID-19 in late February and government responses had a dramatic impact on visitors to retail/recreation places across all capital cities. CBD-dominant local government areas (LGAs) – Adelaide, Melbourne, Perth and Sydney – were more badly affected than Hobart and Brisbane whose metropolitan regions are defined by a single LGA.</p>
<p>As can be seen below, visitor numbers began to decline in early March. Perth’s numbers fell by 42% on March 2. A week later, March 9, numbers in Brisbane, Melbourne and Hobart fell by 10%, 19% and 34% respectively. Sydney experienced its first double-digit decline (19%) on March 14.</p>
<p>From mid-March the numbers went into free fall across all state capitals.</p>
<p>Nationally, retail/recreation visitors were down 76% by April 10. CBD-dominant LGAs were even more dramatically affected. Perth was down by 95%. Melbourne, Adelaide and Hobart were close behind at -93%, -92% and -90% respectively. Brisbane (down 80%) was the least affected capital city.</p>
<p>All these capitals began to experience a rebound in visitor numbers from mid-April through to late July. Brisbane led the way as numbers climbed back to their highest levels, 3% below its baseline, on July 19. Perth was 12% below baseline on the same day.</p>
<p>The return of retail/recreation visitors in Sydney has been a slow, bumpy process and lagged well behind the national trend. The city’s best visitor numbers for the April-July period were on July 4 with -32%. Sydney did not surpass these numbers until October 4 when visitors were 30% below its baseline.</p>
<p>Melbourne’s best day since its low of -95% on April 10 was June 20 when footfall was down by 53%. The second lockdown in early August sent Melbourne’s visitor numbers plummeting again, to -90% on August 22. As of October 16, the city had made a small recovery with numbers down by 85%.</p>
<p><strong>‘Localism’ on the rise</strong></p>
<p>As a result of many people, <a href="https://theconversation.com/5-charts-on-how-covid-19-is-hitting-australias-young-adults-hard-147254">especially casuals</a>, losing their jobs and large numbers of office-based CBD workers <a href="http://www.roymorgan.com/findings/8451-roy-morgan-working-from-home-june-2020-202006290638">working from home</a>, the suburbs have emerged as the dominant space of retail/recreation activity in metropolitan Australia.</p>
<p>The data clearly show retail/recreation numbers in outer-suburban LGAs were much less affected than CBD-dominant LGAs. In other words, a new sense of <a href="https://insideretail.com.au/news/three-key-consumer-behaviour-shifts-that-will-come-out-of-covid-19-202006">“localism”</a> has emerged.</p>
<p>The table below provides an overview of the changes (average, median, minimum and maximum) in visitors to retail/recreation places nationally and for 30 LGAs from across the capital city metropolitan regions from February 15 to October 16.</p>
<p>Nationally, numbers were down almost 20% on average, with a low of -76% on April 10. Nineteen LGAs performed above the national average. Most of these were traditional outer-suburban LGAs in Adelaide, Perth and Sydney.</p>
<p>Unsurprisingly, average visitor numbers in Melbourne’s outer suburban LGAs were well below the national trend. But so too were numbers for the Gold Coast (-22.45%) and Parramatta (-24.16%), Sydney’s so-called second CBD.</p>
<p>The charts below provide detailed overviews of daily trends for CBD-based and outer-suburban LGAs across Adelaide, Melbourne, Perth and Sydney.</p>
<p>Overall trends in CBD and outer-suburban LGAs across the state capitals have followed similar trajectories. However the fall in numbers has been much more severe in CBD-dominant LGAs, while recovery has been more rapid in outer suburban LGAs.</p>
<p>Perth and Adelaide have fared better than Australia’s two powerhouse CBDs – Sydney and Melbourne. This is largely due to a combination of factors including: more effective management of COVID-19; smaller and less dense populations; and fewer international and interstate visitors.</p>
<p>The rebounds in Adelaide and Perth, albeit still below baseline, and the upcoming Christmas shopping period offer a glimmer of hope for CBD retailers in Sydney and Melbourne.</p>
<p>Now that the hard lockdown in Melbourne has ended, we are likely to see an immediate rebound in visitor numbers. However, given how low numbers have fallen, a return to “normality” – a dominant CBD – seems a long way off.</p>
<p>CBD retailers will likely continue to endure the legacy impacts of COVID-19 when this pandemic eventually passes. And they face wider structural challenges from within the wider retail sector, which we discuss in our second article.</p>
<p><em>Written by <a href="https://theconversation.com/profiles/paul-j-maginn-3915">Paul J. Maginn</a>, University of Western Australia and <a href="https://theconversation.com/profiles/gary-mortimer-1322">Gary Mortimer</a>, Queensland University of Technology. Republished with permission of <a href="https://theconversation.com/how-covid-all-but-killed-the-australian-cbd-147848">The Conversation.</a> </em></p>
