- Demand lifts in every CBD
- Vacancy rates also rise
- Property Council of Australia has released the latest Office Market Report
Every CBD across Australia’s capital cities have seen demand lift, thwarting forecasts that the pandemic would hinder or even lead to a collapse of the office property market.
Tenant demand lifted on average 1% across the CBDs and 0.7% in non-CBD markets according to newly released data from the Property Council of Australia.
The data shows all capital cities, bar Sydney and Brisbane, recorded increases higher than their historical average.
Property Council of Australia Chief Executive Ken Morrison highlighted that these figures were especially heartening given the spread of Omicron.
“These are a striking set of figures which illustrate that the office is alive and well in today’s economy, even as the pandemic changes how we use workspaces,” Mr Morrison said.
“While many expected this once in 100 year global pandemic to cause a major spike in office vacancy, these figures show that hasn’t eventuated.”
Ken Morrison, Property Council of Australia Chief Executive
“While aggregate vacancy levels have risen slightly from 11.9 per cent to 12.1 per cent, the driver of this has been a new supply of office space, not a drop in demand.”
According to Mr Morrison, the majority of CBD based firms continue to view their office as an essential part of their future, a suggestion which is reflected by the data.
While demand has lifted, supply also increased slightly (0.2%) driven by new supply entering the market.
The supply of office space across Australia has maintained its trend of remaining above the historical average.
“Since the onset of the pandemic, office developments have continued to come online, and demand for it has largely kept up,” Mr Morrison said.
“The data matches what we’re hearing, and that is that tenants clearly see collaborative and well designed office space as a key component of their ‘new normal’ of working.
“Although these results illustrate the resilience of the office market, there remains a critical need for governments and businesses alike to reinvigorate our CBDs as soon as the health situation allows, and the Property Council of Australia remains committed to leading and contributing to those efforts,” he said.
