Quality market drives Melbourne vacancy rate down

Melbourne’s office market has strengthened over the past six months according to the Property Council of Australia’s Office Market Report released today.

Victorian Executive Director of the Property Council, Jennifer Cunich, said the overall rate has improved a full percentage point from 9.1 per cent to 8.1 per cent over the six months to July 2015.

“Melbourne has the second lowest vacancy rate amongst all of Australia’s CBDs,” says Ms Cunich. “The future remains bright for commercial property in Melbourne.”

“A total of 49,459sqm of new stock is due to enter the market in the second half of 2015. In 2016, a further 71,768sqm will come online with 511,637sqm mooted for the market.

“During the last six months, supply additions grew by 80,755sqm while 64,435sqm was withdrawn. Net absorption was 60,906sqm.

“The North Eastern and Civic precincts continue to have the lowest vacancy rates in Melbourne at 4.7 and 5.0 per cent respectively.

“St Kilda Road vacancy decreased from 9.8 to 9.3 per cent due to 17,841sqm of withdrawals. There is no space in the pipeline for Southbank or St Kilda Road in 2015 or 2016.”

“Vacancy in the Western Core and Flagstaff precincts in the six months to July 2015 decreased from 11 per cent to 10.6 per cent and from 16.3 percent to 8.7 per cent respectively, due to net absorption of 15,466sqm and 8,623sqm.

“Melbourne’s office market continues to enjoy positive demand, reflecting ongoing confidence in the value of quality CBD office locations.

“The property industry continues to play a vital role in the Victorian economy at a time when our State faces many complex challenges.

“To ensure Victoria continues to grow from strength to strength, the new State Government must work cooperatively with the City of Melbourne on sequencing Melbourne’s precinct expansion, accelerating development approvals and easing the property tax burden. We also call on the Victorian Government to rule out new taxes on the CBD such as a mooted levy on property near the proposed Melbourne Metro Rail Tunnel.

The Property Council’s six-monthly Office Market Report has been the industry’s most respected independent office market research publication for more than 20 years.

 

Media contact: Jennifer Cunich | M 0411 118 099 | E [email protected]