CBD office vacancies up

PERTH’S office vacancy rates increased slightly during the past six months, from 3.3 per cent in January to 4.2 per cent in July.

The latest Property Council of Australia Office Market Report shows 157,926 square metres were added to the Perth CBD market in the six months to July, while 115,503sqm of office space was filled in the same period.

Premium space remained the tightest grade at 1.3 per cent vacancy, up from January’s rate of 0.1 per cent.

A-grade space was at 4 per cent, up from 1.4 per cent in January, B-grade was at 5.9 per cent (down from 6.2 per cent), C-grade was at 6.1 (down from 6.3 per cent) and D-grade space was at the same levels as six months ago, 1 per cent.

Given that only 19,472sqm of space is due to come online in 2013, Property Council of Australia WA executive director Joe Lenzo said the latest numbers demonstrated how tight the Perth CBD office market would be over the next two years if current rates of strong demand continued.

“The demand for CBD office space is the highest on record. A total of 115,503sqm of space was filled in the six months to August, which is the equivalent to filling Perth’s tallest tower, Central Park, almost twice over,” he said.

“The office vacancy rate was highest for the C-grade sector at 6.1 per cent. This was the only sector to also record a significant negative take-up of office space and it reflects the much stronger demand for higher quality buildings.”

In West Perth, the overall vacancy rate decreased from 4.4 per cent to 3.1 per cent in the six months to July and the area recorded its highest demand on record, with 19,943sqm of space taken up over that period.

There was an addition of 18,642sqm of new office supply in West Perth.

“A further 15,866sqm of new office supply is due to come online in West Perth in the second half of 2012, but only 4,213sqm is scheduled in 2013,” Mr Lenzo said.