A deserted street in the central business district (CBD) of Singapore, on Tuesday, Sept. 28, 2021
Singapore has had to impose a fresh round of restrictions. Photographer: Lauryn Ishak/Bloomberg

The March Back to Office Heads in Sharply Different Directions

The March Back to Office Heads in Sharply Different Directions

The world’s leading financial centers are breaking step in their march back to the office.

London and New York have, after a summer lull, regained some of their pre-pandemic bounce. Broadway has reopened, and the yards and alleyways of the Square Mile are once again thronged with financial workers. Neither city may be as busy as it was before the pandemic—but a recovery is in sight.

In Asia, the picture couldn’t be more different. Singapore and Sydney have had to introduce fresh restrictions as the number of coronavirus cases spikes. This international divergence is reflected in the mobility data compiled by Google, which tracks the locations of its users.

Out of Office

Workplace activity is still well below pre-pandemic levels

Note: Community Mobility Reports show daily relative change using aggregated, anonymized sets of data from user location history. Data has been smoothed to weekday average. Frankfurt is represented as part of the region of Hesse, being the largest city with 12% of the population. Sydney is represented as part of New South Wales, being the largest city with roughly 65% of the population. Data as of September 24.
Source: Google

What accounts for the difference? Vaccination rates and countries’ varying risk appetites. After inoculating large swathes of their populations, London, New York and, to a lesser extent, Frankfurt are reopening even as the virus lingers. But cities such as Singapore and Sydney that locked down hard and early—and so got people accustomed to very low levels of infection and risk—have found loosening restrictions tougher as they face further outbreaks.

It’s a reminder that the road back to the office will involve many wrong turns.

Sydney

A worker at a construction site in the central business district (CBD) of Sydney, Australia, on Tuesday, Sept. 28, 2021.
Offices in Sydney have fallen empty amid a lockdown. Photographer: Lisa Maree Williams/Bloomberg

Rewind to the start of June and Sydney was leading much of the world in its urban reopening. Office occupancy rates had risen to more than 65% of pre-pandemic norms and the state government was poised to launch a voucher program to encourage people back to the city center to eat and drink.

That’s now a distant memory after a delta outbreak plunged the largely unvaccinated city into a prolonged lockdown. Three months later, immunization rates are climbing—but the heart of the city is empty. Office occupancy fell to 4% of its pre-Covid norm in August, according to data from the Property Council of Australia, as stay-at-home rules encompassed all but a brief list of authorised workers.

Footfall in the central business district is now limited to the likes of construction workers, with the number of passenger exits at the area’s four main train stations down 86% compared with pre-lockdown figures.

Struggling businesses are pinning their hopes on the state government’s promise to start relaxing lockdown measures once 70% of the eligible population are fully vaccinated. The latest projections suggest that threshold will be met on Oct. 11.

However, a quick return to a bustling city center seems unlikely. Under the current roadmap companies must continue to allow employees to work from home if they are able to do so, although that flexibility will be at employers’ discretion from Dec. 1.

Further diminishing the prospect of a quick bounceback is the calendar. The southern hemisphere’s summer begins in December, and many Australian workers traditionally take an extended break combining summer and Christmas vacations.

“Once we get vaccination rates up to a level where we can open up, we will be almost in the summer season,” Rae Cooper, professor of work at the University of Sydney, said. “I expect these seasonal issues will impact strongly and the post-pandemic ‘normal’ won’t emerge until children return to school in late January or early February 2022.”

Singapore

Pedestrians at a near empty plaza in the central business district (CBD) of Singapore, on Tuesday, Sept. 28, 2021.
The latest restrictions are expected to ease in about a month. Photographer: Lauryn Ishak/Bloomberg

Singapore’s stop-start reopening has hit another pause: Authorities imposed tighter restrictions once again on Sept. 27, with daily Covid cases now exceeding 2,000 and expected to rise further.

Defaulting to work-from-home arrangements and limiting social meetings is arguably at odds with the government’s stated aim of living with the virus. While its four-stage transition plan pegs looser curbs to an 80% vaccination rate—a number it has already surpassed—the nation-state remains stalled at the first stage of reopening.

Gan Kim Yong, trade minister and virus taskforce co-chairman, described the decision as “very difficult,” but said the move would “allow us to slow down the speed of increase and avoid overtaxing our healthcare workers.” Restrictions are expected to ease in about a month.

The latest tightening is likely to halt momentum for the city’s developers, who saw an uptick in the return to the office after workplaces were permitted to return to 50% capacity on Aug. 19. Singapore’s biggest real estate investment trust, CapitaLand Integrated Commercial Trust, saw its occupancy rise to 37.3% by Sept. 3 from 20.6% in mid-July. “Hybrid and flexible work arrangements have largely been the norm” among workers at properties owned by real estate group City Developments Ltd. too, a spokesperson said.

About 50% of workers had returned in September to Republic Plaza, CDL’s flagship office building in the financial district, the spokesperson said. It was lower in the preceding weeks due to tighter restrictions, although CDL didn’t provide a figure.

The unpredictable spread of the virus means uncertainty will “continue to waft through the office landscape for the next few quarters,” said Alan Cheong, executive director of research at Savills Plc in Singapore.

“There will always be lingering concerns whether remote working can be completely exorcised,” he added.

New York

Students wait in line to get their temperature taken before entering a public school on the first day of classes in the Bronx borough in New York, U.S., on Monday, Sept. 13, 2021.
Schools city-wide reopened en masse on Sept. 13 with no virtual option for the first time since the beginning of the pandemic. Photographer: Stephanie Keith/Bloomberg

New York is starting to pull out of its delta-induced doldrums.

Since early September, Covid cases in New York City have hovered at around a quarter of their winter peak. Schools are back in session, Broadway has reopened and more workers are back in their offices.

Building occupancies have jumped to the highest levels since lockdowns began in March 2020. About 28% of the region’s office workers were back as of Sept. 22, up five percentage points from a month earlier, according to security firm Kastle Systems, which measures card swipes.

Mayor Bill de Blasio directed all city office workers to return by Sept. 13 and his likely successor, Democratic mayoral nominee Eric Adams, has said he wants to see large companies bringing back their workforces more quickly. Subway ridership at midtown Manhattan stations close to many of the city’s office towers has gradually increased, while traffic is back near pre-pandemic levels.

Finance titans JPMorgan Chase & Co. and Goldman Sachs Group Inc. have been back in the office for months, and transaction volume at Pret A Manger Ltd. stores in lower Manhattan hit a pandemic-high in September, according to Bloomberg’s Pret Index.

The recovery is slow, and tenuous. Employers including Wells Fargo & Co., PwC and Google have delayed their mandated office returns because of the delta variant. And while there’s been improvement, New York is well behind U.S. cities such as Houston, Philadelphia and Washington in filling office buildings, Kastle data show.

Still, there’s been an uptick in demand for office space across the city. Tech firms, including Facebook and Amazon.com Inc., have been in the market for new leases. Google recently announced plans to buy a Manhattan building for $2.1 billion.

Schools city-wide reopened en masse Sept. 13 with no virtual option for the first time since the beginning of the pandemic. In-person learning enables more parents to get back to work—provided the virus doesn’t upend schedules. A week after school started, the city saw its first closure at P.S. 79, a special-education school in Manhattan, after an outbreak among staff.

San Francisco

Staff at Salesforce's Dreamforce 2021 conference take a selfie at Moscone Center on Tuesday, September 21, 2021, in San Francisco, California.
Salesforce.com Inc.’s Dreamforce conference, which typically attracts more than 170,000 people, was limited to select invites when it returned in September. Photographer: Lea Suzuki/San Francisco Chronicle/Getty Images

After the delta variant upended return-to-work plans, many of San Francisco’s offices are still sitting empty—and are likely to stay that way into next year.

Although the city’s case counts have plunged since the summer’s peak, many of the Bay Area’s large tech companies—including Google, Facebook, Apple Inc. and Lyft Inc.—have now punted their returns until January or later. That has created a dichotomy in San Francisco’s recovery: Much of the economic activity has migrated into the residential neighborhoods of the city, while the office-centric downtown continues to be quiet.

About 21% of San Francisco area’s office workers had returned as of Sept. 22, according to Kastle Systems—a figure that is little changed since the summer and the lowest among 10 U.S. metro areas. That’s not to say the region is being abandoned: Tech job listings are back to pre-pandemic levels in San Francisco, and venture capital investment in the area’s companies has doubled compared with 2019, according to Ted Egan, the city’s chief economist.

But the return to normalcy is still a ways off. Almost 20% of those new tech jobs were marketed for remote positions. Among large U.S. cities, San Francisco’s office rents have fallen the most since the first quarter of 2020, data from CBRE Group Inc. show. While Salesforce.com Inc.’s Dreamforce conference returned to the city’s Moscone Center in September, attendance was pared to limited invites. It attracted more than 170,000 people in prior years.

Tourism could bounce back faster than commuting. On a typical Wednesday in 2019, the lines outside the Embarcadero Philz Coffee would stretch out the door, with five baristas working as fast as they could to fill drink orders. The post-pandemic Philz, located at the edge of San Francisco’s financial district, has almost no mid-week morning traffic—it’s the weekends that are seeing the most business, said Jamie Ortiz, a barista at the shop.

“One of the things that’s really amazing about the city’s economy in the past six to nine months, is how much wages have gone up, and how much wages have gone up in leisure and hospitality,” Egan said in an interview. “To me, that means two things. There’s a huge labor shortage in that industry, even bigger than there is in other places. But also, there’s a ton of money behind wanting to reopen.”

London

Vehicles queue for fuel at a Royal Dutch Shell Plc petrol station in London, U.K., on Monday, Sept. 27, 2021.
In London, fuel shortages are complicating many commuters’ journeys. Photographer: Jason Alden/Bloomberg

London’s return to the office had been held up by the spread of the delta variant and then the summer holiday season.

Holiday Season

August had a drop in activity in the Square Mile on weekdays

June

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Note: The activity index is an anonymized and normalized indicator created from the Mapbox Movement data set of mobile device activity.
Source: Mapbox

While most restrictions on people’s mobility were lifted in July, many workers chose to delay their return until schools went back in early September. That summer lull is now over, and staff are returning to their desks en masse.

Traffic at 15 key tube stations in the City of London has been climbing steadily, and reached a post-covid peak on Sept 16, according to data from Transport for London. At the major banks, the desks are starting to fill up. By early September, attendance at Citigroup Inc.’s office hit more than half of its typical pre-pandemic level. Footfall at JPMorgan rose to 40%, up from about a quarter in August, while occupancy at Goldman Sachs’s office was at about halfhalf, and the proportion is continuing to rise.

Pret sandwich sales are also recovering, with sales reaching at least 75% of pre-Covid levels in all of the stores tracked by the Bloomberg Pret Index. Sales in the City of London and Canary Wharf, London’s twin financial districts, reached their highest level since the pandemic last month as bankers went back to work.

However, progress could be reversed. The city is currently facing down a fuel shortage as well as warnings of staff and food shortages heading into winter. Prime Minister Boris Johnson has also warned he could bring back tougher restrictions in the winter if a surge in coronavirus cases threatens to overwhelm the National Health Service. They could include advice to work from home again for a limited period.

Frankfurt

Pedestrians in the financial district of Frankfurt, Germany, on Sept. 30.
Frankfurt’s banks have signaled they would like to bring more people back to the office, eventually. Photographer: Ben Kilb/Bloomberg

The hustle and bustle in Frankfurt’s financial district is still far below its pre-pandemic level. As summer turns to autumn, restaurants in the city center like Manufactum Brot & Butter that once were filled with bankers in suits at lunchtime have been taken over by groups of shoppers and tourists.

Even though a federal law requiring all non-essential office workers to work from home was lifted in July, most of the city’s finance firms aren’t pushing staff to return to their desks because the level of Covid-19 infections remains stubbornly high.

At DZ Bank, one of Frankfurt’s biggest lenders, less than 25% of the workforce was in the office at the end of September. DekaBank, another big financial firm in the city, said it has capped office occupancy at 30% for the time being, with the actual numbers well below the threshold. About half of Commerzbank AG’s employees are still working from home.

The seven-day infection rate in Frankfurt stayed above 100 per 100,000 people for the better part of September, topping Germany’s national average. While the vaccination campaign is making progress, only about 63% of residents in Hesse—the regional state in which Frankfurt is located—were fully vaccinated as of September 24.

RMV, the transit authority serving Frankfurt and surrounding cities, says local train ridership in September was just 60% of its level before the pandemic. That number is little changed from July, even though there has been a slight uptick in recent days, a spokeswoman said.

Frankfurt’s banks have signaled they would like to bring more people back to the office, eventually. Over the summer—when infection numbers dipped briefly—some nudged their staff to pay at least a visit to their workplace.

“Anyone who hasn’t seen the inside of the office in the last few weeks has made a mistake,” Cornelius Riese, the co-CEO of DZ Bank, said at the end of August. For now, though, employers are largely leaving it up to staff to decide where to work—and most are staying home.