(August 4, 2022) The Perth office market is bracing for future success with increased supply of new office space in the CBD.
According to the latest office market report, published today, the office vacancy rate in Perth CBD has risen to 15.8%, an increase of 0.8% since January 2022, mainly due to a 2.4% increase in supply, which includes Dynons Plaza on Hay Street and L’Atrium on St Georges Terrace.
Property Council WA executive director Sandra Brewer said the rising vacancy rate was only part of the story, and the data shows several reasons for optimism about the office market.
“What the results show is that three years into the pandemic, the death of the office has been greatly exaggerated,” Ms Brewer said.
“Overall, the fundamentals of the Perth office market are strong. Tenants are jumping at the chance to move into new space and sublet rates are the lowest in the country. These are all good signs of an improving market,” she said.
Graham Postma, country manager for Savills Australia at WA, said the July statistics confirm that demand in the Perth office market remains positive.
“Net uptake in the CBD for the 6 months to July was over 13,000m² and almost 11,500m² in West Perth. Despite some short-term uncertainty, the market should continue this momentum,” Mr. Postma said.
“Job vacancies, a powerful leading indicator of demand, are at record highs and surpass those seen during the previous boom in 2007.
“As the ‘war for talent’ rages on, the ‘flight to quality’ trend continues as tenants seek to ensure that their offices offer existing and potential staff the best working environment. This is clearly demonstrated by the fact that net uptake has been concentrated in the highest grades in the CBD and West Perth markets,” he concluded.
The West Perth market vacancy rate has also improved significantly, with new data from the Property Council revealing a 2.5% drop in vacancy, the biggest improvement of any market recorded nationally. .
“The CBD of Perth and its periphery are in a strong position to continue to grow. New projects have the highest pre-commitment levels in the country at 82.3% and demand is well above historic levels,” Ms. Brewer said.
“While vacancies still exist, particularly in lower quality stocks, they are likely to be absorbed quickly or repositioned.
“The City of Perth and industry now have the opportunity to work together and continue to promote the strengths, opportunities and benefits of Perth’s CBD as a destination of choice for business.
“New developments and ongoing upgrades to existing buildings will continue to enhance the attractiveness of Perth’s office market and ensure the continued prosperity of our city,” concluded Ms Brewer.