The office vacancy rate in the Sydney CBD, Australia’s biggest capital city office market, fell from 8.1% to 7.2% over the six months to January 2013, moving against the national trend of a rising office vacancy rate, according to the latest Property Council’s Australian Office Market Report.
Nationally, Australian office vacancies now stand at 8.4%, up from 7.8% in July 2012, driven by a “dramatic” fall in demand for office space.
Vacancy rates eased in Perth and Brisbane as demand for office space from mining companies and other businesses that service the resources sector “moved down a gear”.
Perth remains the tightest CBD office market, though its vacancy rate eased from 4.2% to 5.7%, with demand for office accommodation in Perth in the last six months the weakest since 2009.
“The Perth office market was affected by cost-cutting in resources companies, particularly the iron ore sector, last year. This resulted in less demand for office space by firms providing professional services to the sector”, says Property Council executive director,Joe Lenzo.
The Melbourne vacancy rate fell 5.6% to 6.9% over the period with and only premium and A grade stock experiencing substantial positive demand.
Consultants at Charter Keck Cramer anticipate a fall in demand for office space in the Melbourne CBD and Docklands over the next two years, with better quality office space best placed to attract tenants.
In Brisbane, the vacancy rate spiked from 8.0% to 9.1% bringing to an end “a sustained two-year run of strong demand and exceptional take-up levels in the market”.Click to enlarge
PCA Queensland executive director Kathy MacDermott says the slowing resources sector has triggered a fall in demand to a four-year low with net absorption during the six-month period totalling a mere 2,406 square metres.
The against-trend fall in Sydney’s vacancy rate was masked to an extent by a high rate of withdrawals, but also from demand across the top end of the market.