Perth office vacancies push 25pc mark, says DEXUS
Vacancy rates in the Perth office market are edging towards 25 per cent.

Perth office vacancies push 25pc mark, says DEXUS

Vacancy rates in the West Australian capital jumped a further one per cent to 24.5 per cent in the last quarter, but relief may be in sight.

Weakening demand from mining and construction companies is the chief driver behind the negative growth, according to the latest quarterly update from DEXUS, with net absorption turning negative on a figure of minus 17,500 square metres.

However, the company predicted that a lack of new developments until the 2019 financial year mean the situation is unlikely to worsen.

It’s a similar story for the remainder of the office markets surveyed – DEXUS predicting that “most markets are now close to, or have passed, the peak of this supply cycle”.

Other office markets recording an increase in vacancy rates included Brisbane and North Sydney.

The completion of new supply in Brisbane saw its vacancy rate rise to 18.2 per cent, with the rate predicted to remain elevated for at least the next year.

North Sydney’s vacancy rate rose to 11.6 per cent, with an increase in withdrawals resulting from the construction of the Sydney Metro set to reduce that figure in the coming year.

The Sydney CBD returned its lowest vacancy rate since the GFC to record the lowest figure of those cities surveyed at 6.8 per cent.

Rates are predicted to undergo a short-term increase in the next six to 12 months before a combination of increased demand and withdrawals pushes rates back below the 6 per cent mark.

DEXUS noted that while Sydney has approximately 250,000 square metres of office development under construction, and due for completion during the next 12 months, little stock sits in the pipeline beyond this.

Melbourne ‘s vacancy rate dropped by 0.8 per cent to 9.1 per cent, where it is predicted to remain for the next 12 months.

Canberra’s vacancy rate tightened to 13.4 per cent.

Vacancy rates in Macquarie Park, Parramatta and Adelaide all remained steady over the quarter, at 8.3 per cent, 5.6 per cent and 16.6 per cent respectively.

DEXUS stated that tenant demand in Melbourne and Sydney is improving, supported by the strong state economies.

Demand in Brisbane and Perth on the other hand is subdued, supported by major retailers optimising their supply chains.

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