IT firms help slash CBD office vacancy rates

STRONG leasing activity by the information technology and telecommunications sector in the Perth CBD was one of the major drivers behind the recent fall in Perth’s office vacancy rate, according to John Adcock of Colliers Jardine.

He was speaking at the breakfast held last week to launch of the Property Council’s latest Office Market Report.

Mr Adcock said the IT&T sector had been the major player in the CBD leasing market, with the mining sector continuing to be quiet in the second half of 1999.

He said that while IT&T made up only 5 per cent of area leased in major leasing transactions in 1998, this had increased to 26 per cent in 1999.

By contrast, the mining sector represented only 18 per cent of the area leased in 1999 compared to 27 per cent in 1998.

“IT&T companies accounted for many of the large leasing deals in 1999 and should continue to be active in the year ahead,” Mr Adcock said.

“However, with a number of significant mining projects now likely to get the green light during this year, we would expect leasing activity in the resource sector to also pick up late in 2000 and into 2001.”

Andrew Byars of Knight Frank commented on the retail sector and said regional centres had maintained low occupancy costs enabling rental growth in static centres.

He said the current development cycle would increase market share through improved product and specialty offer and that yield would be driven through an investment demand for superior product.

Retail in the CBD was currently experiencing a contracting market share but there were good prospects for increased catchment in the future due to inner city residential growth.

There were also new retailers entering Perth market and improving the central city’s retail offer.

However, retail faced legislative impacts on trading hours and the GST, Mr Byars said.

Landcorp CEO Ross Holt said e-commerce, land and infrastructure supply and community involvement were just some of the factors likely to influence the industrial property market during the next twelve months.

“The current positive state of the industrial market reflects sustained economic growth for a significant period, sustained low interest rates, a high volume of funds chasing blue chip industrial property investments and the restructuring of the

economy,” Mr Holt said.

The WA Government has forecast that the Perth metropolitan area will need about 2500ha to meet demand over the next twenty-five years, he said.

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