04/02/2010 - 09:38

Perth office vacancy rate set to rise

04/02/2010 - 09:38

Bookmark

Save articles for future reference.

Perth's office vacancy rate has increased slightly to 8.2 per cent and will continue to rise this year as further supply is added to the market, new figures show.

Perth office vacancy rate set to rise

Perth's office vacancy rate has increased slightly to 8.2 per cent and will continue to rise this year as further supply is added to the market, new figures show.

In the latest Property Council of Australia's office vacancy report, the Perth CBD office vacancy rate climbed to 8.2 per cent in the six months to the end of January, up slightly from the previous six months' 8 per cent.

Property Council WA executive director Joe Lenzo said that despite the vacancy rate increase, there was a return to positive net absorption to 4,541 square metres.

"As we enter the early weeks of 2010, it is clear that most companies are preparing for future growth; expansion plans are being dusted off, unemployment is trending down and sub-lease opportunities have peaked," he said.

"Reduced rents, full floor vacancies and a pick up in business confidence have seen the number of leasing enquiries increase in the past three months.

"While the typical enquiry has been from small professional services firms seeking space under 1,000 sq m, large space users are starting to return to the market as new and delayed mining and infrastructure projects start to gear up.

"On this basis, while we expect a continued rise in the vacancy rate as further supply is added in 2010, future increases in the vacancy rate will be below the increase experienced in 2009."

Currently 241,700sqm is forecast to enter the CBD area in the next two years, of which 71.5 per cent is already pre-committed.

The council said that on completion, the projects will increase the size of the Perth CBD office market by 18 per cent.

Projects currently under construction are City Square, with BHP Billiton the leading tenant, Raine Square, 140 William Street, Alluvion and Dynons Plaza.

Meantime, the West Perth office vacancy rate remained at 6.1 per cent over the half year to the end of January.

"Current market conditions in West Perth have led to tenants moving to emerging fringe office areas such as Subiaco, Herdsman, Belmont and North Perth. Police and Nurses Credit Society, BDO, iiNet, and Mirvac have all moved to new buildings in Perth's suburbs within the last 6 months," Mr Lenzo said.

A further 20.540sqm is scheduled to come on line in the next two years, which based on historical vacancy rate and pre-commitment rates, will not be sufficient to meet demands.

Mr Lenzo said this will lead to further developments in Perth's inner suburbs.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options