Thursday, 2 February 2023
MEDIA RELEASE
Positive demand continues to drive
CBD office vacancy lower.
Perth’s office market remains robust, with the
latest Property Council of Australia data revealing the CBD vacancy rate is now
15.6 per cent, a 0.2 per cent improvement.
Property Council WA Executive Director Sandra
Brewer said while the improvement seems modest, the results in the Office Market
Report are a strong indicator of underlying market resilience as an additional
13,788sqm space was added to the market in the reporting period.
“Both the Perth and West Perth markets are showing
strong signs of improvement,” Ms Brewer said.
“Even with businesses adapting to hybrid
workforce arrangements, what we are seeing is that the role of the office
remains central to the employee experience.
“Contrary to many predictions, flexibility does
not appear to be reducing demand for space. Sublease vacancy rates – often an
indicator of businesses downsizing space requirements – remain low at 0.6 per
cent, well below the historical average of 1.7 per cent, indicating businesses
are using their whole of office space.
“We are seeing a shift from desk dominant office space,
with tenants increasingly requiring more room for a superior office experience,
with additions such as wellness rooms, collaboration spaces, lounges for
socialising and sophisticated coffee machines,” she said.
There are more encouraging indicators that
vacancy will continue to trend downwards, with strong enquiry levels reported
by commercial property agents towards the end of 2022 and the start of 2023.
Colliers State Chief Executive for Western
Australia Richard Cash said the positive results of the Office Market report
would set the tone for a strong start to 2023 in both the Perth CBD and West
Perth office markets.
“The high level of business confidence in WA is
another positive sign for the broader WA economy in 2023, with national and
multinational companies seeing the clear benefits in having their Australian
headquarters located in Western Australia,” Mr Cash said.
Another promising sign is the high levels of
pre-committed leasing for new projects due to be completed in coming years.
“Property
Council Members in Perth expect to complete several new office towers before
2024 of which 53 per cent of the space is already pre-committed,” Ms Brewer
said.
“The West Perth office market has also seen
another significant improvement with a 2.1 per cent decline in vacancy, one of
the strongest improvements in recorded markets nationally.
“Late last year we saw office occupancy rates return
to 80 per cent of pre-COVID levels, which represented a victory for the many
stakeholders who encouraged the recovery of Perth’s CBD following the pandemic.
“Maintaining momentum for working in CBD offices
will continue to drive demand for space over the long term,” Ms Brewer
concluded.
