Adelaide Office vacancies rise on weak demand
A slump in tenant demand for new office space resulted in a rise in the Adelaide CBD office vacancy rate in the six months to July 2014.
The Property Council of Australia’s latest Office Market Report found the office vacancy rate for the Adelaide CBD was 13.8 per cent in July 2014, up from 12.4 per cent in January 2014.
The combined vacancy rate for Australian CBD office markets was 10.7 per cent in July 2014, ranging from Sydney’s 8.4 per cent to Brisbane’s 14.7 per cent.
“The report found 13,006sqm of negative demand for office space in the Adelaide CBD to July 2014,” said Property Council of Australia Acting Executive Director Lino Iacomella.
“The slump in demand for office space in 2014 coincided with a small increase in new office supplies, with 6,788sqm of new office construction coming online in the first half of 2014 for Adelaide CBD.
“Vacancy rates were highest in Adelaide’s older office buildings.
“Supply of new office stock is expected to increase over the next 18 months in Adelaide’s CBD.
“In the second half of 2014 some 18,520sqm of new office space will come online, and a further 20,470sqm of new office space is in the pipeline for 2015.
“The Adelaide Fringe experienced negative demand for office space of 4,191sqm in the last six months which caused the office vacancy rate to rise from 8.0 per cent to 9.9 per cent in the six months to July 2014.
“No new space is due to enter the market in the Adelaide Fringe.
“The high vacancy rates for Adelaide’s older office buildings, particularly in the C and D grades is resulting in a greater appreciation for refurbishment and alternative uses for these buildings,” said Mr Iacomella.
Key market indicators, Adelaide CBD (aggregate)
| Grade | Vacancy, Jul 14 (%) | Vacancy, Jan 14 (%) | Net absorption, 6 months to Jul 14 (sqm) | Net absorption, 12 months to Jul 14 (sqm) |
| Premium | 11.6 | 6.3 | -2,241 | -3,025 |
| A | 11.2 | 11.0 | -1,100 | 16,644 |
| B | 14.7 | 14.0 | 3,026 | -1,660 |
| C | 14.9 | 11.5 | -9,933 | -17,614 |
| D | 19.0 | 17.2 | -2,758 | 1,533 |
| Total | 13.8 | 12.4 | -13,006 | -7,188 |
Key market indicators, Adelaide CBD (by locale)
| Vacancy, Jul 14 (%) | Vacancy, Jan 14 (%) | Net absorption, 6 months to Jul 14 (sqm) | Net absorption, 12 months to Jul 14 (sqm) | |
| Adelaide Core | 15.5 | 13.9 | -11,324 | 851 |
| Adelaide Frame | 7.5 | 6.9 | -1,682 | -8,039 |
Key market indicators, Adelaide Fringe (aggregate)
| Grade | Vacancy, Jul 14 (%) | Vacancy, Jan 14 (%) | Net absorption, 6 months to Jul 14 (sqm) | Net absorption, 12 months to Jul 14 (sqm) |
| A | 3.1 | 4.4 | 0 | 2,137 |
| B | 14.8 | 11.5 | -1,376 | -1,807 |
| C | 10.1 | 7.6 | -3,315 | -2,388 |
| D | 13.3 | 13.3 | 0 | 335 |
| Total | 9.9 | 8.0 | -4,191 | -1,723 |
Media contact
Lino Iacomella
Acting SA Executive Director
08 8236 0904 or 0417 1 974
John Nguyen
National Research Manager
02 9033 1943 or 0410 449 210
For more information, visit www.propertyoz.com.au/officemarketreport