Apartment developers circle empty West Perth offices
Julie-anne Sprague
Apartment developers are eyeing the West Perth office market in anticipation that struggling landlords unable to fill their once bristling office towers will have little option but to sell.
West Perth houses the state’s junior and mid-tier mining sector, an industry that has suffered enormously as lower commodity prices crimp profits or force closures.
West Perth’s vacancy rate hit 14.8 per cent in the six months to July, up from 12.2 per cent. Eight years ago the vacancy rate was zero.
No new office supply is expected in the medium term but conditions remain challenging as some tenants consider shifting to the CBD.
Apartment developer Paul Blackburne said he expected older office buildings to be sold off over the next couple of years.
“The leases are starting to expire [from the boom years] so we anticipate there will be sites for sale,” Mr Blackburne said. “We will look at them.”
The vacancy rate for A grade buildings jumped from 6.1 per cent while D grade vacancy climbed to 23.5 per cent, from 21.2 per cent.
