Perth is currently a tenant’s market and is likely to remain that way for the foreseeable future. Here’s a quick snapshot ...
Perth's CBD’s official vacancy rate is currently being reported at 14.9%. However, some reports estimate the actual figure to be hovering at around 15.2% following PCA’s boundary changes (see figure 1), which shifted its landscape to a more residential focus. This revised rate also factors in the 24,415 sqm worth of stock injections and 139,603 sqm worth of withdrawals:
However, all-in-all, Perth's office market is showing strong resilience due to:
Prime and Secondary Net face rents increased over the past quarter, sitting at $684 psqm and $461 psqm, respectively. The flight-to-quality trend was the main driver of the jump in Prime rents. However, the city's new Premium stock also commands higher rents thanks to inflation and sky-high construction costs. High incentives of between 46%-53% (depending on the grade, location and building/landlord vacancy profiles) offset increases in face rents.
Compared to other cities, Perth's commercial sublease vacancy is negligible at 0.3% (circa 6,000 sqm) of total stock. This is due to strong occupier demand - the highest in the country - and the city's trend towards office expansion.
Over the next few years, several developments are planned to come online, including:
The completion of some of these major developments (e.g. One the Esplanade) will add upward pressure to Perth’s Prime vacancy rate (12.7%). However, in the near term, Perth’s vacancy rates are likely to go down as consistent demand contends with limited supply.
Tenant CS is a commercial tenant advisory business that offers tenant representation services in Perth. We can also cater to organisations across Australia, with a particular focus on Sydney, Melbourne, Brisbane, Adelaide and Canberra.
We represent you, the tenant, and our in-depth knowledge of the Australian leasing market gives our clients a competitive advantage when it comes to finding a space or negotiating a commercial lease.
If you’re on the hunt for tenant representation services in Perth, book a call with our team today!