Momentum needed to capitalise on office optimism
Significant efforts by businesses and government to incentivise workers back to the CBD is starting to pay dividends, as vacancy rates improve across Perth office markets.
According to the Property Council Office Market Report data released today, the Perth CBD office vacancy rate has decreased to 16.8 per cent, its lowest level since 2015. West Perth’s office vacancy has also improved to 19.1 per cent, a 3 percent change since January.
Sandra Brewer, Executive Director, Property Council WA, said the results were a vote of confidence, not only in the office market, but the WA economy more broadly. However, there is still a long way to go.
“Today’s vacancy rates are an encouraging sign for the Perth office market and the local businesses that rely on office workers to thrive,” Ms Brewer said.
“Commercial office owners and landlords have invested, significantly, in the future of the Perth CBD, keeping offices safe and tenants afloat through lockdowns and downturns.”
“Now is the time for governments to put their foot on the accelerator to get the city into top-gear and maintain the positive economic momentum.”
“Immediate support measures to encourage higher CBD visitation such as free or heavily discounted public transport and reduced pressure on parking costs, will ensure the early signs of improvement translate into strong post-COVID city activity.”
Adding to the improved vacancy figure and indicating renewed confidence in WA’s future growth is the level of office stock withdrawn from the Perth CBD market, as it undergoes renovations to compete for future tenant demand.
“For years Perth vacancy rates have been stubbornly high as tenants have moved to new buildings as they come online, leaving older buildings with vacancies. The most recent results now show demand is starting to exceed supply and tenants are looking to existing office buildings for space.”
Property Council members are reporting increased levels of enquiry with strong economic growth across all industries creating increased demand from existing tenants with many businesses moving to accommodate growing teams.
“A robust office market is crucial to ensuring Perth can leverage off our pandemic success and emerge from COVID-19 as a world-class business destination capable of attracting the talent, investment and the businesses needed to secure WA’s long-term success.” Ms Brewer concluded.
Reduction in West Perth’s office vacancy was primarily driven by new tenant demand, with an additional 10,017sqm of previously empty floorspace now under lease. Sub-lease vacancy in the Perth CBD also decreased, consistent with industry expectations.
Media contact: Emily Young | P 0475 161 328 | E [email protected]