Bulldoze barriers to reduce office vacancy rates
Office vacancy in the Adelaide CBD market is treading water over the six months to July 2015 with significant amounts of space due to come online in the second half of the year.
The Property Council of Australia’s latest biannual Office Market Report released today reveals vacancy in the Adelaide CBD remained at 13.5 per cent.
Adelaide Fringe vacancy decreased over the period from 9.1 per cent to 8.0 per cent, due to withdrawals and positive demand.
South Australian Executive Director of the Property Council of Australia Daniel Gannon said that the Adelaide office market story is one of adaptive reuse.
“The takeout message from this data is around adaptive reuse and removing barriers to reusing ageing commercial building stock,” said Mr Gannon.
“We’re seeing an increase in vacancy rates for B, C and D Grade building stock, with C Grade at 17.2 per cent and D Grade at a staggering 19.7 per cent.
“With 40,193sqm of space due to come online in the second half of 2015, 10,700sqm in the pipeline for 2016 and 37,000sqm of mooted space, we need to solve our adaptive reuse predicament.
“That means we need to start bulldozing development and building code barriers preventing the transition from ageing commercial buildings to prime multi-residential stock.
“With South Australia’s current dire unemployment story, this latest office market data is an economic story around improving confidence and investment conditions in our state.
“That means accelerating commercial stamp duty abolition, lowering land tax, reducing onerous red tape, particularly around adaptive reuse barriers when you take into account climbing B, C and D Grade vacancies.
“Vacancy in the B Grade segment increased from 10.7 per cent to 11.1 per cent over the period due to 7,920sqm of supply additions. Net absorption over this time was 5,638sqm.
“Negative net absorption of 430sqm caused C Grade vacancy to increase from 17.0 per cent to 17.2 per cent.
“Over the same period, D Grade vacancy increased from 19.2 per cent to 19.7 per cent due to a negative net absorption of 3,022sqm, with 2,722sqm in withdrawals.
“In positive news, Premium Grade vacancy decreased from 10.7 per cent to 9.4 per cent due to net absorption of 525sqm, while A Grade decreased from 12.1 per cent to 11.8 per cent due to 1,732sqm of net absorption.”
Key market indicators, Adelaide CBD (aggregate)
Key market indicators, Adelaide Fringe (aggregate)
Media contact: Daniel Gannon | M 0421 374 363| E [email protected]