Perth Office Vacancies Climb on Back of New Supply
The Perth vacancy rate continues to climb due mainly to an influx of new office supply.
The Property Council’s latest Office Market Report found that the vacancy rate increased from 16.6 to 19.2 per cent during the six months leading to January 2016. Nationally, the Australian CBD vacancy rate increased to 10.9 per cent.
In West Perth office vacancy rose from 10.8 to 12.2 per cent in the six months to January 2016.
In the six months leading to January 2016, an additional 113,463sqm of new office supply was added to the Perth CBD market.
“The Perth office market is continuing to adjust after the resources boom and the huge supply of new stock. However, the latest results also show that demand for new office space in Perth is recovering,” Property Council Executive Director Joe Lenzo said.
“After three consecutive years of negative demand, the Perth CBD recorded positive net absorption of 42,387sqm in the six months to January 2016. This included Shell Australia moving into its new office at Kings Square.
“The jump in tenant demand for new offices mostly occurred in the A grade segment.
“Most grades of office space recorded a rise in vacancy including the Premium grade which increased from 9.3 to 15.9 per cent.
“The report also found that Perth’s new office supply pipeline is rapidly drying up with only 31,171sqm of new office supply due in 2016. After this, there is no new office supply expected for a number of years.
“The return of positive tenant demand for Perth office space coupled with a diminishing pipeline of new supplies indicates that Perth can expect the market to stabilize in the year ahead.”
Media contact: Joe Lenzo | M 0419 044 768 | E [email protected]
Key market indicators, Perth CBD (aggregate)
Key market indicators, West Perth (aggregate)