Positivity flows into office sector

A growing chorus of major voices in Perth’s commercial property sector is suggesting the worst of the recent period of sluggish activity may be over, with consistent demand for space and renewed investor interest indicating the marketplace is on the improve.

A panel of property experts will convene at the Hyatt tonight for the Property Education Foundation’s Commercial Briefing, comprising JLL managing director John Williams, CBRE’s Lloyd Jenkins, Colliers International’s John Del Dosso and Alison Robertson from Brookfield Property Partners.

Business News understands guests at the event will hear about consistent improvements in the office market since vacancy rates of 22 per cent were recorded in the last quarter of 2016.

That theme would corroborate separate reports released last month by Investa Property Group and CBRE, which both indicated that five years of deteriorating market conditions were coming to an end.

Mr Williams said the $91.8 million sale of an office portfolio to Centuria last week confirmed that investors were increasingly interested in Perth assets.

“The bottom of the CBD office market cycle was Q3 2016,” he said.

“Since that time, the CBD has recorded three quarters of positive absorption as the value equation in the city draws tenants from the suburbs.

“Investors also sense an improving market and see Perth as value, relative to overheated markets on the east coast.”

Mr Del Dosso said the turnaround in fortune for the office market was similar to what was witnessed in the mid to late 1990s.

“In the early ’90s, we saw vacancy rates at 33 per cent, but within just five short years this shrunk dramatically, to 12 per cent,” he said.

“We are definitely seeing a flight to quality, and this is evident across the premium A-grade buildings.

“Savvy businesses are now striking and doing deals while the iron is hot.”