They paid high rent to be near high foot traffic. Then the pandemic hit
Professionals in Sydney's CBD are feeling the pinch of high rents and some face the risk of closure because of the loss of foot traffic from office workers staying at home.
GP clinics, pharmacies, and physiotherapists have reported a dramatic drop in business in the city since the start of the coronavirus pandemic, with people opting to visit professionals in the suburbs instead.
New research from the University of Sydney Business School shows that more than 40 per cent of NSW office workers, including accountants, managers and administration staff are working from home, largely undisrupted.
Technicians, tradespeople and drivers have lost up to a quarter of their business, with many unable to do the bulk of their work from home.
Research co-author Associate Professor Matthew Beck said the Sydney CBD normally has a concentration of office workers and a large proportion are working remotely.
Accountant Peter Knight has kept working from his office in Sydney's CBD while his clients contact him online.Credit:Rhett Wyman
Accountant Peter Knight spends half his week working from an empty office in Pitt Street.
He is happy to work from home because, like many accountants, he does most of his work online and on the phone.
While accountants are legally required to maintain a physical address, it makes sense for it to be in the city, even now when clients no longer visit. He said the CBD address holds a cachet for his clients.
"There is a thing about having an office in the city that clients just like," he said.
Sydney physiotherapist Mike Blackwell has found business tough in his Sydney CBD practice during the COVID-19 pandemic.
David Dahm, a chartered accountant who provides advice to 1200 medical practices around the country, including Sydney, said up to 10 per cent of GP clinics in the CBD faced the risk of closure or mergers because of their reliance on office workers and other 'walk ins' for business.
He said some larger corporations with multiple practices were transferring GPs to busier clinics in the suburbs, where patients were returning to local doctors, and considering closing their city practices or putting them into "hibernation".
"We are seeing up to 20 to 30 per cent movement downward in foot traffic revenue in the heart of Sydney," he said.
David Dahm is an accountant who gives advice to GPs. He says 10 per cent of clinics are facing closure. Credit:Paul Jones
Physiotherapist Mike Blackwell, who runs a practice in Pitt Street, said there had been a 75 per cent drop in patient numbers in April, compared with the same month last year. In July, things picked up with numbers down by only 40 per cent on the previous year.
But recent outbreaks of COVID-19 in the CBD, including at the City Tattersalls Club gym, had made some newer patients uncomfortable about venturing into the city.
With JobKeeper to fall back on, Mr Blackwell hopes to survive by "battening down the hatches and making sure that only essential costs are going out".
"At the end of JobKeeper if things haven't changed, it could be difficult."
Pharmacy Guild NSW branch president David Heffernan said chemists in the CBD and the airport, which rely on retail trade, "have been hit hard".
"Some pharmacies are reporting a 90 per cent downturn in their turnover," he said. "They are hanging on with JobKeeper."
Feras Karem, whose family runs a pharmacy group, said the impact of COVID-19 on a number of outlets in the Sydney, Chatswood and Parramatta CBDs had been "devastating".
"We pay a high rent to be in high footfall areas and the footfall has disappeared," he said.
Joe Martorana, general manager of Fullerton Health Medical Centres, which has GP clinics around the country, including in Sydney's CBD and Broadway, said face-to-face consultations in the city had halved because of the loss of office workers, tourists and international students.
"The consults and billings are down by about 30 per cent," he said. "Face-to-face visits are down over 50 per cent and if it wasn't for telehealth those businesses would be in strife."
Sydney GP Michael Wright says inner city clincs have experience a big drop in patient visits.Credit:Janie Barrett
Woollahra GP Michael Wright, who is also the deputy chair of the Royal Australian College of General Practitioners NSW/ACT branch, said his patient numbers halved during the early stages of the pandemic.
"People were just scared about coming out and it was partly balanced out by the introduction of telehealth at the end of March," he said.
One GP who did not want her name published told The Herald she had recently left a CBD practice that was "struggling" to stay open. She now works at a suburban practice which is seeing more patients.
Australian Medical Association (AMA) NSW president Danielle McMullen, who works as a GP in Newtown, said, for as long as the pandemic continues, "we definitely need to have strong support for telehealth beyond September 30 so that people can continue to see their usual GP".