Demand for CBD office space has remained strong across Australian capital cities with the office sector showing resilience in the face of bleak predictions caused by the pandemic.
The Property Councils July Office Market Report showed overall CBD vacancy increased from 11.3 to 12 per cent, despite the increase the market still recorded positive demand of 85,986 sqm over the six months to July 2022. Australian Non-CBD markets also saw a vacancy increase, with rates rising from 13.9 to 15.2 per cent.
Brisbane and Adelaide were the only two CBDs to record a vacancy decrease, falling from 15.4 per cent to 14 per cent and 14.5 per cent to 14.2 per cent respectively. The most notable vacancy increases were recorded in Canberra and Melbourne where vacancy increased from 6.3 to 8.6 per cent and 11.9 to 12.9 per cent respectively. Sydney CBD vacancy increased to 10.1 per cent, with Perth also increasing to 15.8 per cent.
Sublease vacancy increased slightly in both the Australian CBD and non-CBD markets, with Melbourne responsible for more than half of all CBD sublease vacancy.
Property Council Chief Executive Ken Morrison said the figures were heartening given we are living through a third year of the COVID-19 pandemic.
“In a healthy sign for our CBDs, the office market continues to defy previous dire predictions, with demand still in positive territory after nearly three years of the pandemic,” Mr Morrison said.
“While the Australian office vacancy increased by 0.8 per cent to 12.9 per cent over the six months to July 2022, it’s new office space that is driving this outcome, not businesses wanting less office space,” he said
“While the office market has proven to be resilient and demand is in positive territory, our CBDs still need attention,” Mr Morrison said.
“The recovery in our CBDs needs to be top of mind for governments and businesses even as we deal with elevated levels of COVID-19 in the community,” he said.
For more information on the Office Market Report results, click here.