Anywhere but Melbourne. The New Geography of Senior Executive Mandates
Jamal Khan, Managing Partner, Amrop Carmichael Fisher
The move conversations I have with business leaders and owners in Melbourne the more alarmed I am becoming regarding a less than subtle and accelerating corporate and ownership rebalance affecting Melbourne. The data we are seeing throughout 2024 and 2025 is no longer subtle; it has solidified into a structural trend that necessitates an immediate strategic response.
What began as post-pandemic hesitation has solidified into a demonstrable flow of capital and executive talent away from Victoria, primarily towards Sydney and, with striking momentum, Brisbane. This has profound implications for the creation and retention of C-suite and senior executive mandates in Melbourne.
Drawing on recent ABS, property market, and labour force data, the facts confirm that Melbourne’s historic status as a commercial heartland of Australia is under critical threat.
The Latest Data: Melbourne’s Lag vs. the Northern Surge (2023-2025)
The metrics driving C-suite location decisions are unequivocal: the capital and workforce are shifting.
The Inter-State Talent Drain
The flight of owners and senior talent is most clearly illustrated in the migration figures. For the last three years, Queensland has been the undisputed national leader in Net Interstate Migration (NIM), gaining thousands of residents each quarter. In contrast, Victoria continues to register a net loss of residents to other states, a trend that reflects not just lifestyle choice but a decisive assessment of where opportunity lies.
This is not the migration of backpackers; this is the movement of business founders, established executives, and high-net-worth individuals who take their intellectual and financial capital with them.
The Office Market Bellwether: Investment and Occupancy
The performance of the CBD office market — the ultimate proxy for head-office commitment, demonstrates a widening gap:
- Vacancy & Demand: As of late 2024/early 2025, Melbourne CBD’s office vacancy rate was stubbornly high, hovering around 18-20%, reflective of prolonged soft demand. Brisbane, meanwhile, is the standout performer, achieving the lowest vacancy rate among the major CBDs (around 10%).
- Effective Rent Performance: Demand pressure translates directly into pricing power. In the fourth quarter of 2024, Brisbane CBD saw net effective rents grow by a remarkable 11.9% year-on-year. Over the same period, Melbourne CBD saw a 3.2% fall in net effective rents. This stark divergence is the most compelling signal of where corporate occupiers are choosing to invest.
- The CBD Workforce Gap: The most worrying metric for me is the physical presence of the workforce. Latest research shows that the Melbourne CBD workforce remains below its pre-pandemic peak (down by tens of thousands of workers). Conversely, both Sydney and Brisbane’s CBD workforces have surged past their 2019 levels. Sydney has cemented its position as Australia's largest CBD workforce, significantly outpacing Melbourne. Fewer workers mean fewer senior executives required to manage them.
The investment focus has been squarely on the north. Capital flows follow opportunity, and Brisbane’s current trajectory as an investment destination is proving too compelling for many organisations to ignore.
The C-Suite Calculus: Why the Lag Persists
The lag in Melbourne’s recovery and the ongoing corporate migration are not merely about post-COVID lethargy; they are the consequence of policy choices that have made Victoria's commercial environment less competitive.
The Perpetual Tax Penalty
While there has been marginal relief for small businesses, the core disincentives for large, executive-heavy firms remain:
The Debt Drag: Victoria’s high state debt continues to drive policy decisions that place a disproportionate burden on large employers through elevated payroll tax rates and surcharges. This directly impacts the cost of establishing or retaining a major head office with a high-salaried executive team.
Commercial Property Tax Overhaul: The Commercial and Industrial Property Tax (CIPT), which took effect in July 2024, represented a major structural change. While abolishing stamp duty frees up upfront capital, replacing it with a perpetual annual property tax fundamentally alters the long-term Total Cost of Ownership (TCO) for a head office. CFOs are now factoring in an ongoing annual state levy, a factor that is easily comparable against other jurisdictions that have chosen more growth-focused incentives.
Regulatory and Stability Headwinds
The perception of Victoria's fiscal fragility and regulatory overreach, stemming from the legacy of the pandemic response, continues to influence major investment decisions. When multinational firms select a regional hub, stability and predictability are paramount. The continued need for high-taxation policies and the perception of a slow, politically complex planning environment act as a headwind, slowing the pace of new private sector investment needed to underpin job growth.
The Executive Employment Impact: A Crisis of New Mandates
For the executive search market, the consequences are stark and immediate: a structural deficit in the creation of new, ambitious C-suite and Tier-1 executive roles in Melbourne.
Stagnation at the Top
We are seeing a noticeable trend:
Relocated Roles: Existing senior executive roles are being migrated when a company moves its headquarters or central function (e.g., Head of National Operations, Group CFO).
Missing New Mandates: Crucially, when companies achieve significant growth or launch new ventures requiring a fresh CEO or Divisional President, the mandate is increasingly lodged in Sydney or Brisbane and increasingly overseas in lower cost countries, where the capital is flowing, the commercial leasing market is tighter, and the future growth forecast is stronger.
This creates a serious risk of executive talent obsolescence for those rooted solely in Melbourne. The best and most dynamic growth opportunities, the mandates that define a senior leader's career trajectory, are following the path of capital.
The Shallowing Talent Pool
If the city fails to generate a sufficient volume of ambitious, new executive roles, it will suffer a secondary talent drain. Ambitious, high-performing leaders will naturally gravitate toward the ecosystems — Sydney's financial markets or Brisbane's infrastructure/growth sectors — that promise the most robust career progression over the next decade.
This is not simply a competition for existing talent; it is a competition for the creation of future leadership pipelines. Unless Melbourne’s policy setting can rapidly restore its fiscal balance and offer a genuine competitive advantage in cost and regulatory simplicity, it risks becoming a market defined by replacement mandates rather than expansion mandates.
Conclusion: The Urgency of Recalibration
While some forward forecasts suggest Melbourne may lead an expected rebound in white-collar employment in 2025-26, the current data confirms a deep competitive lag driven by persistent policy choices. A forecast is not a strategy.
Melbourne must urgently address its taxation structure for large enterprises and restore its reputation for stability and ease of business. The executive community needs a clear, compelling commitment from government and industry that the city's commercial foundations are being re-secured. Otherwise, this concerning trend will graduate from a rebalance to a fundamental, long-term shift, and the executive capital flight will continue unabated.
Sources & References:
- Australian Bureau of Statistics (ABS): Quarterly National, State and Territory Population data, Q2 2024 (Net Interstate Migration).
- Property Council of Australia / Commercial Real Estate Analysts (Q4 2024 / Q1 2025): Data on CBD Office Vacancy Rates, Net Effective Rent Growth (Melbourne vs. Brisbane), and Net Absorption.
- Roy Morgan Research: CBD Workforce statistics (2024-25), comparing Melbourne, Sydney, and Brisbane recovery levels.
- State Revenue Office (Victoria): Latest data on the Commercial and Industrial Property Tax Reform (CIPT) effective July 2024, and ongoing Payroll Tax thresholds for 2025-26.