2024-10-21-莱坊-Perth_CBD_Office_Market_September_2024_10页_1mb

Perth CBD Office Market Summary

Perth's CBD office market remains relatively stable, with vacancies rising slightly as prime developments complete, but effective rents holding firm. Net absorption was negative (-9,811 sqm) in H1 2024, driven primarily by secondary market losses (-6,511 sqm). Prime vacancy rates fell to 13.3% (down 170 bps from H2-2023), while secondary rates rose slightly to 19.3%. Prime effective rents grew by 12.9% year-on-year, with incentives decreasing by 30 bps to 2.4%, leading to net effective rent growth. Secondary effective rents rose by 10.0% due to higher face rents.

The overall vacancy rate increased by 0.8% to 15.5%. New supply includes 9 The Esplanade (33,500 sqm, H1 2025) and refurbishments like QV1 (21,306 sqm) impacting prime stock. Construction costs remain elevated, slowing new development. Lower quality secondary space now accounts for only 36.5% of the total stock, down from 42.0% in 2020.

Refurbishments and higher amenity standards are driving demand for new and upgraded spaces, particularly in premium grade A stock. However, despite lower vacancy, A-grade effective rents remain below prime levels. National office demand remains weak, with Perth experiencing moderate declines overall, though core prime space continues to be the most in demand across all cities.

Notable transactions include the sale of 181 St George Street for $26.5 million, reflecting subdued investment activity in 2024 due to economic uncertainty. Prime yields are at 7.4%, secondary at 8.8%, with a wider spread. West Perth has lower vacancy (11.5%) and attracts SMEs, with effective rents higher than CBD secondary but below prime.

Net absorption drops were observed across grades, but secondary space had the weakest demand. The market moderation continues with muted investment activity impacting yields and effective rent performance.