Good news litters the Perth office market after a long period of pandemic-bred uncertainty.
With mining activity on the move and certainty of the future relevance of office space on the up, Perth’s CBD office landlords have plenty to celebrate. JLL released their 3Q22 Australian National Office Market Overview last week, and in it were glowing indicators surrounding demand, future supply and future drivers.
The report supports our own findings on the WA office sector, and anyone looking to enter the market – while the industrial real estate market remains crowded with competition, even while the peak is in its rear-view mirror – might be even more eager to do so after a quick read.
Here’s the Q3 2022 office market report in a nutshell, merged with a few of our own insights.
Demand is on the up
Net absorption – defined as the sum of space that became occupied minus the sum of space that became vacant during a specific period – totalled 16,200 sqm in Perth’s CBD during the third quarter of 2022. It’s an indicator that the conditions for occupier demand in WA’s office market is on the way up.
Most of us property experts know our local city’s office vacancy rate by heart, but it’s still exciting to see the recorded 19.3-per cent Perth CBD office vacancy displayed on JLL’s report. This is a 0.9 per cent decrease over the quarter after the strongest net absorption result since 2018.
Increase in short-term supply
Perth’s existing construction pipeline is strong, according to JLL, with four projects already in development totalling 88,000 sqm. These will make the first major development completions in over three months.
There remains a strong demand for new developments in the Perth CBD, and thanks to many construction sites around Elizabeth Quay, a range of mooted developments are on the rise. Demand will continue to soar for the city precinct: This is welcomed news.
Mining-led office space requirements
It’s no secret WA’s mining sector is buzzing with activity, from growing lithium prospects to proposed gas projects. The approval of a long pipeline of resources projects means demand for new and established office spaces in Perth’s CBD will be led by mining and resources companies.
With the sale of our industrial portfolio now completed, and as office property relevancy rises, we are keeping our eye on the growing number of prospects in Australia’s major office precincts. To learn more about our office property investment opportunities and how you can invest alongside us, get in touch with us today.
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