Melbourne CBD demand driving lower vacancies

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 is reflective of Victoria’s strong population growth and robust confidence levels, evidenced by last month’s ANZ/Property Council Survey.

Victorian Executive Director, Sally Capp, said the overall vacancy rate has improved from 5.9 per cent to 4.6 per cent over the six months to January 2018.

“Melbourne has experienced the largest drop among Australian CBDs and now boasts the equal-lowest vacancy rate amongst all of Australia’s CBDs,” says Ms Capp.

“The decrease in Melbourne’s office market vacancy rate was fuelled by strong demand and saw a flight to quality, with demand concentrated in the A Grade segment.

“Over the last six months, 22,142sqm of space was added and 30,964sqm was withdrawn.

“Across the next three years, Melbourne CBD will supply over 450,000sqm of new stock. Pre-commitments for this future stock sit at over 54 per cent.”

Ms Capp said Melbourne’s future commercial office supply remains a top concern for the Property Council as it is a key ingredient for any successful global city.

“We are interested in the policy changes necessary to provide a steady and continued supply of high quality commercial office space, and particularly their impact on the pipeline of supply beyond 2020. Strong supply is crucial to support our growing population and smart jobs of the future to allow Victoria to remain internationally competitive.”

Media contact:  Sally Capp |  E  scapp@propertycouncil.com.au