Perth sublease market set to turn around

Perth’s office sublease space has increased by more than 70 per cent since the start of the year but supply is likely to have reached its peak, according to the latest research from CBRE.

CBRE’s latest Perth Sublease Barometer reveals more than 7,500 square metres of sublease space was added to the market during September, taking Perth’s total office sublease space to more than 80,000sqm.

More than 50,000sqm of the available sublease space on the market has been generated by engineering companies reliant on contracts in the iron ore secor, including WorleyParsons, Clough and Aecom.

A further 11,431sqm is linked to the mining sector, while the finance insurance sector accounts for just less than 12,000sqm of sublease space.

However CBRE senior director office services Andrew Denny said there had been a slowing in the rate of new supply in recent weeks.

"Our view is that we are now at peak sublease vacancy levels and the coming months will see a reduction in available space for sublease," he said.

"Perth can move quickly, and the likely outcome is that the market will perform on a stronger basis than currently expected based on higher than forecast future demand levels.

"Although it is early days, the election result was a turning point for the Perth CBD leasing market, with a noticeable return of confidence and activity levels in the following weeks. Enquiry levels have not only increased, but the nature of leasing enquiries has altered."

Mr Denny said current enquiries were coming from companies with larger space needs.

Shell is looking for an additional 2,000 to 3,000sqm, Woodside for an additional 700 to 900sqm and Link Market Services for up to 2,000sqm, according to CBRE.

Sublease space currently accounts for 5 per cent of the total CBD office market.