Jobs growth fuels tightening office market
Melbourne vacancy rate falls to 6.4%
Melbourne’s office market has strengthened over the past six months according to the Property Council of Australia’s Office Market Report released today. This reflects Victoria’s economic buoyancy and employment boom.
Victorian Executive Director of the Property Council, Sally Capp, said the overall vacancy rate has improved from 7 per cent to 6.4 per cent over the six months to January 2017.
“Melbourne continues to host the second lowest vacancy rate amongst all of Australia’s CBDs,” says Ms Capp.
“A total of 40,246sqm of new stock is due to enter the market in 2017. This will be followed by 51,400sqm in 2018 with 165,000sqm expected in 2019 onwards. During the last six months, 136,368sqm of space was added and 48,130qm was withdrawn. Net absorption was 109,612sqm.
“Future supply remains a concern for the city with only 40,246sqm of new stock due to enter the market this year and 51,400sqm forecast in 2018.”
Ms Capp said Melbourne’s future commercial office supply is a top concern for the Property Council as it is a key ingredient for any successful global city.
“We are commissioning research into the drivers of the approaching shortfall and the policy changes necessary to provide a steady supply of high quality commercial office space into the future.
“Eastern Core, Docklands and Flagstaff precincts have the lowest vacancy rates in Melbourne at 3.1, 3.3 and 3.7 per cent respectively.
“North Eastern is the only precinct with a double-digit vacancy at 14 per cent, up from 8.3 per cent in July 2016. Negative demand was concentrated in the Civic and North Eastern precincts where vacancy rates both rose.
“Melbourne’s office market vacancy rate decreased over the last six months due to the second highest net demand figure on record (more than three times the historical average). Positive demand was concentrated in the A Grade segment.”
For more information or to purchase the January 2017 Office Market Report, click here.
Media contact: Sally Capp | E firstname.lastname@example.org