Melbourne demand surges as Australian Office vacancies tighten
13 August 2018
Property Council:
The
Melbourne CBD is the standout performer of a tightening Australian
office landscape according to the latest Australian Office Market Report
released by the Property Council of Australia.
Office market vacancy rates across Australia fell from 9.6 per cent to
9.1 per cent over the six months to July 2018, with Melbourne’s
office
vacancy rate hitting a 10 year low of 3.8 per cent (down from 4.6 per
cent in January 2018) – the lowest vacancy rate of all Australian CBDs.
All of the CBD markets record declines in their vacancy rates during the
period, ranging from 3.6 per cent in Melbourne; 4.6 per cent in
Sydney; 12.1 per cent in
Canberra; 14.7 per cent in
Adelaide; 14.6 per cent in
Brisbane and 19.4 per cent in
Perth.
All CBD markets had lower vacancy rates than the same time 12 months ago
with the exception of Canberra which increased from 11.6 per cent in
July 2017.
‘Office vacancy rates are a good measure of economic performance, and
Melbourne is clearly the stand-out performer of the nation,’ said Ken
Morrison, Chief Executive of the Property Council.
‘Melbourne is our fastest growing city and best performing economy which
in turn is creating strong jobs growth and demand for office space at
more than twice its historical average.
‘Most of the country’s future office supply over the next three years
will be built in Melbourne, which is exactly where you want it –
responding to strong demand.
‘While Melbourne is performing strongly, the Sydney market has also
tightened further, with a CBD vacancy rate of 4.6 per cent, down from
4.8 per cent six months ago,’ Mr Morrison said.
The results for Brisbane show a welcome return in market activity with
vacancy across the CBD dropping from 16.1 per cent to 14.6 per cent.
Perth has passed its peak vacancy, with both the CBD and West Perth
recording drops in vacancy, although at 19.4 per cent the CBD vacancy
rate in Perth is still above the national average.
Adelaide’s CBD office vacancy rate has dropped for the third consecutive
period, with fringe vacancy also dropping. There has been a strong
flight to quality in the Adelaide CBD with premium vacancy dropping to
2.8 per cent, the lowest vacancy level since July 2012.
‘Across the country we are seeing a shift towards premium office
quality, but a more challenging outlook for lower grades of stock,’ Mr
Morrison said.
‘The challenge for planners and owners is to come up with solutions to
encourage the utilisation of secondary office stock to help meet future
demand and support vibrant and affordable commercial districts in both
CBD and non-CBD areas,’ Mr Morrison said.
The non-CBD vacancy rate increased slightly from 8.9 per cent to 9 per
cent over the six months to July 2018. The top three non-CBD markets are
East Melbourne (3.1 per cent), Parramatta (3.2 per cent), and Macquarie
Park (5.4 per cent).
Five of the top ten performing non-CBD markets are in New South Wales:
Parramatta, Macquarie Park, North Sydney, Chatswood and Crows Nest/St
Leonards.
For a comprehensive range of Australian property industry data visit the
Data Room at
http://research.propertycouncil.com.au/data-room
--ENDS--
Source: Property Council - www.propertycouncil.com.au
Contact: Media contact: Matt Francis | M 0467 777 220
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