Premium grade net face rents have risen slightly from Q4 2022. Image – Canva
  • Office Marketbeat reveals steady 6.3% year-on-year growth in Perth
  • Leasing activity is on the rise in Perth
  • Several major projects will bring new office stock to the Perth

Office market rents continued to drive higher in Perth during the first quarter of 2023 according to Cushman & Wakefield’s latest quarterly Office Marketbeat; this is in line with the trend observed across most of Australia’s major CBD office markets.

The Perth CBD office market saw steady year-on-year growth of 6.3%.

The Q1 data showed a rise in prime net effective rents, increasing by 4.5% from $370 to $380 per sqm.

Prime net face rent, overall vacancy (6 monthly)

Source: PCA; Cushman & Wakefield Research
The Office Marketbeat revealed leasing activity is on the rise in Perth, especially for pre-fitted spaces due to the increasing costs of construction.

Cushman & Wakefield’s Research Manager, Jake McKinnon, says that in Q1 this year prime quality space continued to experience solid absorption at the detriment of secondary stock.

“Demand is continuing to build in most locations, with premium buildings and inflationary conditions pushing rents higher.”

“While we’re seeing variation across CBD markets and at a building level, the trend is clear,” Mr McKinnon says.

Supply pipeline

Several major projects will bring new office stock to the Perth market this year.

The construction of One The Esplanade is expected to be completed by Q1 of 2023, which will deliver 54,000 sqm of office space. The Prime grade stock has already seen commitments from Chevron, Herbert Smith Freehills, Parliamentary Services and Minter Ellison.

The Capital Square Tower 3 is set to bring 15,690 sqm of office space to the market, while GDI’s Westralia Square 2 will add another 9,100 sqm of prime-grade space in 2023.

Supply pipeline: new developments & major refurbishments

Source: Cushman & Wakefield Research; PCA

The Office Marketbeat reveals that an additional 171,000+ sqm of development applications are planned for 2025 and beyond but there may be delays on the horizon.

Due to factors such as rising construction costs, inflation rates, interest rates, and supply chain disruptions, there is mounting pressure on current and future development projects.

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