Office Market Report

The Property Council of Australia has compiled its annual comprehensive audit of office space in over 25 markets across Australia.

Northern Territory Executive Director of the Property Council Ruth Palmer said that while our vacancy rates show Darwin has dropped to 17.2 per cent from 21.6 per cent we must note that this is purely due to the timing of this report.

“We need to be mindful that this report has taken Cavenagh House off the vacancy market since it has been demolished which had accounted for 3 per cent of stock in the CBD,” explained Ms Palmer.

“Along with Cavenagh House, extra space leased in the TIO Centre and Charles Darwin Centre has contracted vacancies in the A Grade segment.

“To put it in numbers we have seen 6,613sqm of withdrawals and 4,533sqm of net absorption. [See table below.]

“This figure will change significantly again when the new Health building is completed and the current Health House plus a floor in Darwin Plaza become empty as the transition to the new Health building commences.

“This is simply a timing issue rather than any real movement in the market.

“We already know that there will be 12,248sqm of space due to come online from 2021 onwards.

“The Darwin CBD is the primary employment hub for the Top End and is in desperate need of additional employment and economic activity.

“We need to continue to focus more on improving amenities in the City that aim to bolster construction, retail, hospitality, tourism, and the ever-growing number of residents that call the city centre their home.

“The Vacant and Derelict Site Levy that the government is proposing will not do anything to fix the problem of empty buildings.

“Taxes and levies don’t encourage investment and they definitely will not improve the performance of the CBD. We believe it will further deteriorate the market.”

 

The Property Council has called on the Northern Territory to consider 8 recommendations that it believes will improve the CBD.

1. MORE EVENTS IN THE DARWIN CBD
   Provide financial incentives, simplify regulatory approvals, and install infrastructure for events to drive more activity into the Darwin CBD. Schedule and plan events for periods of low activity and work with traders to ensure these events will complement existing products and services already on offer in the Darwin CBD.
2. AMENDMENTS TO THE NORTHERN TERRITORY PLANNING SCHEME
   We need to fix the planning rules that currently encourage the decentralisation of our primary activity centres like the Darwin CBD. We need to alter the rules to offset the additional construction costs related to developing in the Darwin CBD so that there is a level playing field with the rest of the Top End. Provide concessions on planning controls for repurposed buildings.
3. INCREASE THE NUMBER OF RESIDENTS LIVING IN AND AROUND THE CBD
   CBD residential concessions on council rates (see Adelaide CBD Revitalisation Strategy).

   Provide Stamp Duty concessions for CBD residential units.

4. INCREASE EMPLOYMENT IN THE DARWIN CBD
   Fix planning controls to discourage/restrict the development of new large commercial office developments outside the Darwin CBD. Establish NT Government Policy on NTG Department locations for Darwin CBD.
5. REDUCE STATUTORY CHARGES
   We need to reduce all statutory charges that have increased above CPI over the last 10 years.
6. BEAUTIFY PROBLEM SITES
   Identify and prioritise sites that the community/industry feel are harming the vibrancy of the Darwin CBD and develop a targeted approach that engages our cultural and indigenous organisations to come up with community-led solutions to beautify these sites.
7. EXAMINE PAYROLL RELIEF FOR BUSINESSES LOCATED IN THE DARWIN CBD
8. EXPEDITE CAR PARKING REFORM TO IMPROVE FEASIBILITY OF NEW BUILDINGS & RENOVATIONS

“We are committed to providing solutions-based options that serve a purpose and will continue to work with industry and our members to ensure we have the best interests of the Territory at the forefront,” concluded Ms Palmer.

 

Key market indicators, Darwin (aggregate)

Grade	Vacancy, Jan 19 (%)	Vacancy, Jan 18 (%)	Net absorption, 12 months to Jan 19 (sqm)	Net absorption, 12 months to Jan 18 (sqm)
A	8.1	14.6	5,726	4,312
B	27.4	29.4	-431	1,011
C	54.8	.4	-762	-173
Total	17.2	21.6	4,533	5,1

Media contact: Ruth Palmer | M 04 428 314 |   E [email protected]