Perth office vacancies near 15%: JLL

Perth’s office vacancy rate has jumped to 14.7 per cent, according to commercial agency JLL, with statistics showing the CBD has the highest A-grade vacancy in Australia.

JLL’s research showed 15.8 per cent of Perth’s A-grade buildings were currently empty.

JLL head of office leasing WA, Nick Van Helden, said much of the empty space could be attributed to resources sector and related companies downsizing their office requirements.

“The jump was not unexpected given vacancy rates are forecast to peak at 16.4 per cent next year, due to the substantial new supply coming online,” Mr Van Helden said.

JLL research analyst Sophie Fletcher said vacancy levels would regulate over time as tenants moved from lower grade buildings to higher-quality office accommodation.

“Perth has a high percentage of older buildings with smaller floor plates, which will also likely encourage tenant movement,” Ms Fletcher said.

Downwards pressure on rents remains a feature of the market, with prime gross effective rents falling 4.2 per cent over the third quarter of 2014.

Since the second quarter of 2012, Perth CBD prime gross effective rents have declined by 27.4 per cent, JLL said.

Nationally, JLL recorded positive net absorption of 19,800 square meters over the third quarter of 2014, with a combined capital city vacancy rate of 12.4 per cent.

JLL national director of research Andrew Ballantyne said business conditions had improved in 2014, with Sydney and Melbourne at the forefront of the recovery.

Over the three months to the end of September, Sydney recorded net absorption of 15,100sqm, while in Melbourne, 27,400sqm of space was absorbed.

Brisbane’s vacancy rate blew out to 16.7 per cent over the same period, while in Adelaide the vacancy rate was steady at 14.8 per cent.

Canberra’s vacancy rate rose to 14 per cent in the quarter, to its highest level since monitoring started in 1978.

“Corporate Australia has a more positive outlook on revenue growth, headcount expansion, and ultimately real estate requirements, JLL head of office leasing NSW Tim O’Connor said.

“While efficiency and productivity continue to be at the forefront of larger occupiers’ minds at lease renewal time, we are starting to see evidence of tenants leasing additional space and we expect this trend will become more pronounced in 2015.”