Thursday 3 August, 2023
Surging demand revitalises Perth office market
Premium refurbishments and innovative new office spaces are revitalising the Perth office market, driving a surge in demand.
Despite 67,479 sqm of space coming online in the last six months, Perth’s office vacancy rate has remained stable at 15.9 per cent, with only a slight 0.2 per cent increase since January 2023, according to the Property Council of Australia July Office Market Report.
Property Council WA Executive Director Sandra Brewer emphasised the headline numbers hide a more significant story, as the data revealed a nation-leading surge in demand for the Perth CBD.
“Demand has soared beyond the historical average by more than double, showcasing the strength of Perth’s strong post COVID-19 return to work and the enduring significance of the CBD as a premier destination for businesses,” Ms Brewer said.
The West Perth office market has recorded its 5th period of improvement, where office vacancy rates have declined by 2.1 percentage points, bringing the current vacancy rate to 11.1 per cent.
Commenting on the market trends, Cushman & Wakefield Director Head of Leasing WA, Roly Egerton-Warburton, expressed his optimism, saying the strengthening of commercial terms in the Perth CBD was highly impressive.
“Net rents are increasing, and incentives are being pushed down by a shortage of fitted space,” Mr Egerton-Warburton said.
“Perth is leading the charge on occupancy nationwide, which mirrors the performance of our economy. WA is now the world’s largest producer of lithium, gold and iron ore and the direct link from the resources sector to CBD tenant demand is very clear.
“West Perth is a great barometer of this showing a further drop in vacancy. Cushman & Wakefield are very bullish about the coming 12 months,” he concluded.
The data also indicates a continued decline in sublease vacancy rates, keeping Perth’s rate well below the historical average.
“A low subleasing rate is a positive indicator of market stability and confidence, suggesting businesses occupying office spaces are confident in their growth and are optimising spaces effectively,” Ms Brewer said.
“Flexible workspaces has also emerged as a popular solution for businesses, as we witness a growing trend of offices seamlessly integrating these flexible offerings within their premises.
“High-quality innovative office spaces continue to invigorate the Perth office market, providing businesses with modern and adaptable workspace options to cater to their evolving needs.
“This ongoing transformation promises a vibrant future for Perth’s office landscape,” Ms Brewer concluded.
Media contact: Megan Lack | 0449 252 380 | [email protected]