- In Sydney and Melbourne CBDs, businesses continue to leave or reduce their space requirements.
- Brisbane and Perth CBDs continue to see positive take-up and have improved their occupancy.
- The Sunshine Coast, Gold Coast, Darwin CBD, Parramatta, Newcastle and Wollongong will see demand.
The changing face of Australia’s CBD offices has seen more businesses moving towards “employment nodes” rather than the traditional inner-city working environment, with West Perth being named the top choice for office markets across the country by an expert.
Head of Research Ray White Commercial, Vanessa Rader said that over the past few years, there have been a number of office locations unable to rebound from the government-imposed lockdowns, with staff continuing to work from home.
She said this has changed the landscape for new take-up of stock and movements across the regions and has seen demand increase for a number of different office markets around the country.
The largest office markets, Sydney and Melbourne CBDs, continue to record negative net absorption, as more businesses leave or reduce their space requirements.
This has resulted in increases in vacancies to 11.3 per cent and 13.8 per cent respectively.
While those markets which were not hampered by the same level of lockdown, such as Brisbane and Perth CBDs, continue to see positive take-up and have improved their occupancy.
The greater trend, however, has been the move out of CBDs into growing employment nodes which have followed population movements.
West Perth in demand
Ms Rader said that West Perth is the top choice as an office market given its location and the state of the WA economy.
“The largest suburban office precinct in Western Australia, this market has had a hard few years given the high vacancy rates of Perth CBD,” she said.
“With competition from the CBD in terms of quality, price driven by high incentives has seen West Perth vacancies be at a prolonged high.
“However, we have seen vacancies fall over the last three years, as the attractiveness of this market grows, given its parking and affordability compared to the improving Perth CBD market.”
Ms Rader said Perth’s CBD had also benefited from a lack of lockdowns in recent years.
“Mining, engineering, and construction continue to grow their footprint, however, professional services such as finance have increased their holdings, capitalising on the incentives on offer after a period of prolonged high vacancies,” she said.
Brisbane remains popular
Brisbane’s Fringe is another area that has been seeing solid demand Ms Rader said.
“The high population growth in Queensland has had a positive impact on the office market across the state,” she said.
“Brisbane Fringe recorded the second highest net absorption of all Australian office markets of 63,625sqm, however, this is the largest non-CBD office market in the country with over 1.3 million sqm of stock.
“Improvements in this location indicative of a changing appetite for locations which can offer parking and affordable, quality accommodation options.”
Ms Rader said Brisbane’s CBD continues to lure businesses: “Brisbane is the fourth largest CBD in the country and has attracted the greatest level of take up over the last 12 months.
“Vacancies currently sit at 12.9 per cent in a market which has averaged 14.3 per cent over the last ten years.
“Improvements in employment demand in the city borne out of a growing population has resulted in the need for new and expanding businesses to absorb existing stock,” she said.
Other markets that are likely to see continued demand include the Sunshine Coast, Gold Coast, Darwin CBD, Parramatta, Newcastle and Wollongong.