Vacancy rates renew city project optimism

PERTH’s office vacancy rate has fallen to the lowest level in more than a decade, according to the latest Property Council Office Market Report released this week.

The vacancy rate in the CBD has fallen to 9 per cent – down from 11 per cent in July and well below the 30 per cent vacancy rate experienced in 1992 following the completion of the QV1 building. West Perth’s vacancy rate fell to 6.3 per cent compared with 10.5 per cent for January 2000.

The report, released in conjunction with the Office Space Use survey, reveals a further 32,300 square metres was absorbed in the past six months in both the Perth CBD and West Perth.

PCA chief executive Joe Lenzo said the figures would give developers renewed optimism to go ahead with any development projects. Mr Lenzo said that even if there was a number of new projects that did go ahead over the next few years it would be unlikely that vacancy rates would approach levels seen after the latest office building boom in the late 1980s and early 1990s.

Unlike the builders of a decade ago, developers today were unlikely to go ahead with a project based purely on speculation, he said. Developers were much more cautious now and looked at getting some commitment from an anchor tenant before proceeding with work.