Perth Office vacancy rate continues climb

Perth Office vacancy rate continues climbThe vacancy rate in the Perth CBD is continuing to climb and is now the highest capital city vacancy rate in Australia.The Property Council of Australia’s latest Office Market Report found that the office vacancy rate for the Perth CBD was 16.6 per cent in July 2015, up from 14.8 per cent in January 2015.At the same time the average capital city vacancy rate across Australia was 10.7%, with the Sydney CBD the lowest at 6.3%. The report found vacancy rates in the Perth CBD varied according to building quality, from 9.5% for Premium-grade to 21.5% for B grade buildings.”The market was expecting this sort of result as Perth adjusts to the impact of weakening office demand as a result of the mining sector downturn and the creation of new office demand from other growth industries”, said Joe Lenzo, WA Executive Director of the Property Council of Australia.”The higher vacancy rate was caused by negative demand for new office space and some new office supplies.”We expect the vacancy rate to peak early 2016 after a raft of new towers adding some 135,000 sqm of new space come on-line in the Perth CBD. Following that the Perth office market will have several years of stability with no major new office supplies expected.”In this period the pressure will build on owners and operators of older buildings in Perth to consider investment in refurbishment to retain and attract new tenants, or possibly consider alternative uses for the buildings like conversions to residential apartments”, said Mr Lenzo. In Perth’s major secondary office market, West Perth the vacancy rate was steady at 11%.Media contact: Joe Lenzo | M 0419 044 768 | E [email protected]