Realtors disagree on Perth office vacancy decline
- From: The Australian
- September 29, 2011
Source: PerthNow
PERTH'S office vacancy rate is falling, but the rate of decline is subject to dispute.
The vacancy rate struck a record 2.8 per cent low during the September quarter, according to real estate firm Savills, but the estimate from its competitor Jones Lang LaSalle is 4 per cent.The latest Property Council of Australia office report said the mid-year vacancy rate was 7.8 per cent. Savills West Australian joint managing director Paul Craig said the office market demand was being fuelled by the resource sector, with premium CBD office vacancy at nearly zero and A-grade vacancy at 1.2 per cent.
"There is a distinct lack of supply and developers aren't developing because banks won't lend," Mr Craig said.
"It will only get worse in the future with rents increasing and incentives all but disappearing."
The Property Council of Australia WA division disputed the Savills figures, but acknowledged that demand was strong for office space in Perth.
"I doubt the market is that tight, but in the last two years we have seen triple the take-up of office space over the long-term annual average," said Joe Lenzo, the division's executive director. "The market will continue to stay tight."
Mr Lenzo said many people expected that when BHP Billiton moved into the new City Square building on St Georges Terrace next year offices that the mining giant had occupied would go back on the market. "Now we are hearing that they are going to keep that space, which is also in St Georges Terrace.
"After the few new buildings earmarked to be ready for occupancy next year are completed, there will be nothing new for another four to five years."
Next year there will be an additional 84,000sq m of office space available in the Perth CBD, of which 75,000sq m has been precommitted.
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