With increased confidence in the resources sector, comes an increased demand for tenant spaces in the CBD and surrounding areas.
Sheffield Property is predicting that developers will be dusting off the plans for a number of new office developments on the city fringe over the next 12 months. However, should developers commence work on a new 10,000sqm build this year, the project would not be complete until 2023. The lack of supply is expected to result in increased rents for the next two years until future projects are delivered.
With the State Government securing over 16,000sqm in deals concluded by office leasing specialist Sheffield Property in Q1 2021, the supply of new, A-grade office space with large, contiguous floors has all but dried up in the city fringe.
Exacerbating the situation further, office and workplace trends have changed in recent times. Employers are now placing increased importance on creating working environments that are more staff friendly with a focus on building and precinct amenity, sustainability and wellness. This means a large portion of existing office spaces no longer meet modern workplace requirements.
New office buildings are designed to cater to this change in trends, and landlords are seeking to retrofit existing buildings with new entry lobbies, increased capacity in the end of trip facilities and on floor services that are commensurate with new buildings – however, this is not always possible.
While the current climate is putting stress on the leasing industry, a glimmer of hope is presented by Sheffield Property with the recent completion of a 10,500sqm A-grade office building in Subiaco.
Sheffield has been appointed to lease 500 Hay Street which includes contiguous floorplates in excess of 2,200sqm and enhanced technical specifications – design characteristics typically only seen in new builds located in the CBD.
Sheffield Property Joint Managing Director, Digby Sutherland said 500 Hay Street presented a compelling opportunity not only because of its location, but competitive leasing costs compared to comparable CBD buildings.
“Its location is ideal, situated in the centre of the Subiaco retail precinct with the train station just 150m down the road and the new Vibe Hotel next door that provides conference facilities, café, and a bar and restaurant,” Mr Sutherland said.
“Tenants will also enjoy 220 under cover car bays and significant end of trip facilities, including 14 showers and 120 bike storage racks.”