- Sydney has maintained a vacancy rate below 10%
- Vital to inject life into the CBD post-lockdown, Acting NSW Executive Director of Property Council stresses
- Perth has seen office market improve thanks to resources boom
Despite health restrictions in place since the beginning of the pandemic, the Sydney CBD office market remains resilient, according to the Property Council of Australia (PCA)’s latest Office Market Report.
With the property industry fighting through extended lockdowns and restrictions, Acting NSW Executive Director, Lauren Conceicao, said the recent figures in Sydney were encouraging, with Sydney maintaining a vacancy rate below 10%.
“The CBD has been a slow-moving story, but tenant demand has increased by 0.6% from Jan to July 2021 and vacancy overall has increased from additional supply coming online, an increase from 8.5 percent to 9.2 percent,” Ms Conceicao said.
“Net CBD demand is above historical average, with a notable uptick in the availability of subleasing and demand for premium is at its highest.”
Learning from the Melbourne experience, Ms Conceicao said it was vital to inject life back in the CBDs post-lockdown.
“Melbourne showing the lowest demand since records began in 1990 highlights the need to get the engine roaring on our Sydney CBD for the benefit of the economy in the short, medium and long term.
Lauren Conceicao, Acting NSW Executive Director Property Council
“We can’t afford to become complacent so we must do everything within our capabilities to ensure we don’t do permanent damage to our CBDs.
“There has never been a more critical time for the industry, these next few months could have a very long-lasting effect on our future so we will continue to do everything we can to support and advocate towards coming out of these lockdowns with at least harm as possible.”
Andrea Roberts, national Head of Leasing for Knight Frank Australia, said that the first half of 2021 had seen a robust performance from office leasing markets nationally, despite the Australian office vacancy rate increasing to 11.9% over the six months to July 2021 – the highest level in 25 years.
“Enquiry levels in the first half of 2021 exceeded pre-pandemic levels reflecting the desire of occupiers to address the changing needs of the workplace post the pandemic disruption and move up the office quality scale.”
While still a tenants market, the Perth office market has seen demand from all sectors with the sub 500 square market in particular very strong along with the demand from large corporates and the State Government.
However, the number of appropriate high-quality office supply remains an issue.
“Although the West Perth office market vacancy levels are at historical highs, this is due more to the lack of high quality fitted premises rather than the incentive pulling power of the CBD,” said Ian Edwards, Joint Head of Leasing, WA.
