Perth’s Office Market Heads Back to School
As the Perth CBD office market vacancy rate reaches the highest level in 20 years, Perth has the opportunity to diversify and repurpose ageing office buildings for other uses like student accommodation.
The Property Council’s latest office market report found the Perth CBD office vacancy rate rose from 19.2% to 21.8% during the six months leading to August 2016. Nationally, the average vacancy rate fell within the same time period from 10.5% to 10.2%.
Speaking at the Office Market Report breakfast, Education City Project Executive Director Gaye McMath said that all of the state’s major universities were looking to secure private investment for foreign student accommodation within the CBD.
“There is a real demand for the vibrant city lifestyle among foreign students particularly those from Asia, ” she said.
“These students are looking to live and work in the CBD and commute to their place of study.”
“Perth used to account for around 10% of Australia’s foreign student market, but this has dropped to 7% in recent years, a move to utilise vacant offices for student accommodation will revitalise Perth’s hold in the market.”
At the event, JLL Director Office Leasing, David Evans said that vacancy rates will likely peak in 2016, but owners and managers should be prepared for a slow recovery.
“We’ve been bouncing along the bottom for some time,” he said.
“But with no new supply until 2018, we certainly have some breathing space.”