Businesses in Perth are looking for office spaces with key extras if they are to move and landlords should consider this if they wish to reduce vacancy rates, according to Ray White’s latest Between the Lines research.

 

The report found that while the Perth CBD and West Perth office leasing market continued to see challenging times, buildings with attractive extras were luring in new tenants.

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Ray White Commercial (WA) Director of Office Leasing Clive Norman said that the Perth CBD Office market had endured another period of elevated vacancy with vacancy levels sitting at 18 per cent for the past year.

 

He said that a combination of reduced demand levels together with new supply completions made any possibility of recovery for the Perth CBD slow.

 

“The positive take-up of space recorded this year is ahead of all other CBD locations in Australia, however, not enough to translate into positive movements for the effective rental market,” Norman said.

 

“Buildings that have absorbed stock during this period feature quality existing fit-outs, refurbished foyers and access to additional building facilities such as casual meeting areas, end of trip facilities or inhouse café options.”

 

Ray White Head of Research Vanessa Rader said the positive take-up of space recorded in the Perth CBD market over the past two and a half years had been the shining light in an otherwise difficult broader state economy.

 

“While absorption has been at a limited rate, it’s aided in the continued downward trajectory in vacancy, however it’s been heavily reliant on the movement of tenancies from outside the CBD to the CBD rather than real, organic growth in space needs,” Ms Rader said.

 

Norman said the West Perth office market had seen five tough years.

 

He said tenancy leakages to the Perth CBD had added to the overall poor performance of the West Perth market where vacancies had fluctuated rapidly.

 

“After what appeared to be an improvement in take-up last period, the double whammy of supply re-entry and tenant losses has resulted in a sizeable increase in vacancy,” Norman said.

 

“West Perth has historically been popular with some tenant types seeking high car parking ratios and more affordable rents (whereas) the lure of quality end of trip facilities, fitted out suites, refurbished entrance foyers and greater local amenity choices with coffee shops and restaurants on the doorstep all have added to the appeal of a move into the CBD.

 

“There are early signs of renewed interest that aren't quite translating into deals but the flight to quality does equally apply to West Perth, so landlords should look at building facility upgrades where feasible.”

 

Check out the report here: August 2019 – Perth CBD & West Perth Office Leasing Overview