Perth CBD office vacancy rates have hit their lowest level in three years, dropping from 7.8 per cent to 3.3 per cent in the six months to January.
The Property Council of Australia’s latest Office Market Report showed that in the past six months alone, net absorption of office space in the inner-city was 47,000sqm, equivalent to a 40-storey office tower, according to the council’s executive director, Joe Lenzo.
He said the drop in the CBD vacancy rate indicated the strong demand for office space in the resources sector had spread to other industries.
Demand for office space was strongest for premium buildings, with a very tight vacancy rate of 0.1 per cent, down slightly from last year’s July rate of 0 per cent.
The take up of premium space accounted for 5,072 square metres of the total 80,592sqm for the 12 months to January.
Grade A office space accounted for the largest uptake in the past 12 months at 51,146sqm (32,154sqm in the six months to January). Grade C came in at 2,288sqm for six months and 3,283sqm for the full year.
Grading of office space is a commonly used voluntary system developed by the Property Council and uses physical, technical and aesthetic factors such as view, location, environmental soundness, quality of elevators and size of the floor plate to grade the quality of office space.
“The report also revealed that 11,524sqm of new office space was added to the Perth CBD in the six months to January 2012 and some 119,000sqm is expected to come online in 2012,” Mr Lenzo said.
“Most of the new office space to be delivered in 2012 is already pre-committed and the remainder should be accommodated by the above-average rate of office space absorption prevailing in Perth.”
Mr Lenzo said another factor contributing to a tighter office market in Perth was a rise in the withdrawal of office space for redevelopment or refurbishment. “We can expect more withdrawals as owners invest in their building to compete with new office supplies,” he said.
The market also tightened in West Perth’s office space, where the vacancy rate fell from 5.4 per cent to 4.4 per cent.
“The strong economic fundamentals in Perth will require more supplies of office accommodation than is currently planned and it is likely that Perth will experience acute shortages of office accommodation in the next two years,” Mr Lenzo said.
The Perth commercial office market was the strongest in Australia and the PCA report corresponded with other economic data showing WA was leading the country, he said.
