Perth office vacancies falling but still high

Perth’s office market is continuing its recovery, with vacancies falling for the fifth consecutive quarter and the city recording the second-highest office takeup of any Australian city in 2019.

Research from JLL shows 5,800 square metres of empty office space was taken up by tenants in the last three months of 2019, taking the yearly total to 28,900sqm.

JLL WA strategic research manager Ronak Bhimjiani said overall vacancies fell by 0.3 percentage points in Q4 to finish the year at 19.1 per cent.

“The Perth CBD market has continued its pathway into recovery with a third consecutive year of positive net absorption reported in 2019,” he said.

“Net absorption of 28,900sqm remains significantly above the long-term average for the market, and is evidence that business conditions are improving on the west coast of Australia.”

Mr Bhimjiani said while the 19.1 per cent vacancy rate remained high, the amount of empty office space had fallen for five consecutive quarters.

“The preference of quality remains a key requirement for tenants, reflected in the spread between prime and secondary grade assets,” he said.

Prime office properties were 13.5 per cent vacant, JLL said, while secondary assets were 27.8 per cent empty.

JLL WA head of office leasing Nick Van Helden said professional services had been the standout performer in 2019, followed by the mining sector.

“These two sectors are large contributors to CBD office space, and strong take-up figures within these sectors usually result in robust conditions within the Perth CBD office market,” he said.

Nationally, Brisbane’s office market was Australia’s best performer in 2019, with 44,900sqm of vacant space taken up by tenants.

Across all markets, net absorption was 50,000sqm for the year, largely driven by an increase of 63,200sqm of vacant office space in Sydney.