A LACK of supply will be the big issue for Perth’s office market in 2012, with record-high office take-up figures sending the CBD vacancy rate spiralling to its lowest level in three years.
Statistics released by Jones Lang LaSalle last week show the 109,400 square metres of office space absorbed in Perth’s CBD in 2011 was almost five times the annual average of 22,500sqm, and nearly three times the 38,000sqm of vacant space.
The Perth CBD recorded more than 100,000sqm of net absorption just once in Jones Lang LaSalle’s 40-year series, in 2010.
Jones Lang LaSalle director of national market research, Andrew Ballantyne, said 2010 was meant to be a tough year.
“However, the demand for space – driven by the resource and resource-related sector – gathered momentum in 2011,” he said.
Jones Lang LaSalle head of leasing WA Nick Van Helden said Perth remained the tightest office market in the nation, with the total vacancy rate falling to 2.5 per cent and the prime vacancy rate dropping to 1.5 per cent, its lowest level in three years.
Across CBD office markets, 337,000sqm of office space was absorbed over 2011 for a national vacancy rate of 7.2 per cent.
“Supply is the big issue,” Mr Van Helden said. “It is unlikely that we will see any major completions until 2014 once construction of existing projects ends in early 2012, so there’s a two-year period where there will be no more space to absorb.”
He said unprecedented demand had led to an increase in prime gross effective rents of 20.5 per cent in the last 12 months to average $856/sqm.
“Meanwhile, demand for office space continues to extend beyond the CBD,” Mr Van Helden said.
“West Perth has seen its vacancy rate fall to 2.8 per cent, making it the second tightest major market in Australia.”