WFH sends CBD childcare to unhealthy nook, G8 says

Insurance banking firm Suncorp, which has nearly 13,000 employees, has forecast that CBD office space usage will decrease by 20 percent by 2024, as employees only work in the city two days a week.

However, real estate investment manager Charter Hall has seen new demand for CBD office space, although the addition of hybrid workplaces would persist.

G8 already has a low CBD exposure – only 10 centers in the overall portfolio.

However, a trade update last week showed that CBD center occupancy rates were down 29.6 percentage points from pre-pandemic levels. At the suburban level, the number fell only 5.7 percent, and that included the impact of the lockdowns in NSW and Victoria.

“I think the reality of people not working in an office environment five days a week will remain,” said Carroll.

This had an impact on locations that the G8 could select for new centers. “We haven’t opened a CBD center in a while, and we haven’t got one on our radar,” he said.

Mr Carroll argued that the trend towards homeworking did not result in parents altogether avoiding sending children to centers. That’s because people were looking for an education for the kids or realizing that it was difficult to work at home with a two-year-old, he said.

“But we noticed [working from home] has an impact on the location that people use, ”he said.

The occupancy rate of the regional day-care centers corresponded to the overall trend and was 3.1 percentage points above the level before the pandemic. This reflected that people moved to regional areas when they could keep jobs, he said.

“To … give an NSW-type example: I’m going to be moving to Gosford or the central coast with my family. [where] Housing is much cheaper, ”he says.

“We see a general migration of people to regional locations and that drives demand.”

G8 said total occupancy in established centers was 2.1 percentage points lower than the pre-COVID-19 2019 equivalent. The underlying operating profit for the eleven months ended November was $ 43 million, above market estimates, it said.

The G8 had found that there had been 119 center closings in the past five months, with an average duration of seven days, losing revenue of $ 3,300 each day, or nearly $ 2.75 million per center.

Morningstar analyst Gareth James said the drop in revenue could continue into the first half of 2022 as it closes. “COVID-19 exposure in younger children should decrease in the second half of 2022 as older siblings in the 5 to 12 year old cohort are vaccinated from January,” he said.

Carter Bar Securities analyst Peter Drew said that while Queensland had 0.5 percentage points better occupancy than before the pandemic, “ongoing COVID clusters could disproportionately affect the centers of Queensland as the state has less experience with it coping with outbreaks and this could be more disruptive [G8’s] Merits “.

Childcare providers like G8 had pointed out that retaining staff – crucial for child and parent satisfaction – is becoming increasingly difficult, but that there are no measures to improve working conditions.

Morningstar’s Mr. James said staffing remained an issue. “The opening of international borders in 2022 will alleviate some of these concerns, although we recognize that lower salaries, and thus the attractiveness of childcare as a career option, have been an ongoing issue in the childcare industry since before the pandemic,” he said.