Three speed office market a window into national economy

‘Three speed’ office market a window into national economyOffice market vacancy rates rarely make headlines, however as economic indicators go, they offer a unique insight into what is happening at the coal face of the Australian economy, and the current view is of a deeply fragmented level of economic performance across the states and territories. Headline figures from the latest six monthly data released today show strong demand for office space in Sydney and Melbourne, declining demand and increasing vacancies in Brisbane, Perth and Canberra, and little change in Adelaide, Hobart and Darwin. The Property Council’s biannual Office Market Report is Australia’s most comprehensive audit and analysis of office market data nationwide. “The picture emerging from the office market is that the two-speed resource boom economy has flipped and fragmented into three very distinct positions – strong, weak and flat,” Property Council of Australia Chief Executive Ken Morrison said. “Office market statistics might not capture the imagination, but they are a window into the soul of our shifting economy. “In the Sydney and Melbourne CBDs, businesses are expanding to take up more space, reflecting the stronger economic growth in those states. “Sydney recorded the highest demand for new office space in four years, at twice historic levels, and the lowest office vacancy rate of all the capital cities. “At the other end of the spectrum, the biggest beneficiaries of the mining investment boom, Brisbane and Perth, are the two capital cities now facing the highest office market vacancy rates in the country, along with Canberra, at 15.6, 14.8 per cent and 15.4 per cent respectively. “Each of these markets is experiencing weakening demand for office space and higher vacancies, with Brisbane and Perth also set to see substantial amounts of new space added over the next two years. “For Queensland in particular, these figures underscore just how much work the incoming government – be it ALP or LNP – has to do to turn things around by pursuing reform that will attract new investment and the jobs that flow from this. “While there are some positive signs in Adelaide, Hobart and Darwin, these markets are largely flat and the adoption of policies to drive economic growth and a resurgence of demand are sorely needed. “The results from this report reinforce the need for governments at all levels to make the reforms and the investments needed to drive economic growth.” For further comment: Ken Morrison, Chief Executive (Contact: Fiona Benson, Head of Media and Communications, 0407 294 620) John Nguyen National Research Manager Ph: 02 9033 1943 or 0410 449 210