Resources boom underpins strong Perth CBD office market

Perth’s CBD office market is among the most tightly held in the nation, according to the Australian Property Council’s twice-yearly Office Market Report.

The total office vacancy rate in Perth is 7.8%, down from 10.2% in January this year and 10.6% in July last year.

In the six months from January, net take-up of Perth office space was 33,087 square metres. The city ranked as the third tightest office market, after Brisbane and Melbourne.

Office space absorption is at its highest rate since January 2006 and almost four times the 20-year average, the report says.

According to Joe Lenzo, executive director of the Australian Property Council’s WA division, the state of the Perth office market remains dependent on the resources sector.

“We can’t get away from the fact that the Perth office market hangs on resources, but what has been happening in the past 12 months is that demand is high but it is coming from third-tier professional operations that service the resources industry,” he says.

There has been expansion from accountancy businesses, legal firms and public relations outfits that are capitalising on the resources boom.

“They are picking up a lot of work and expanding which is putting pressure on the office market. Demand for space in the CBD is much higher than we expected,” Lenzo says.

The Office Market Report found that West Perth’s office market also did well as the nation’s second-strongest non-CBD region, with a vacancy rate of 5.4% in July, up marginally from 4.9% in January. East Melbourne is the tightest non-CBD office market in Australia, with a vacancy of 2.5%.

“West Perth is very popular with boutique operations such as medical services and project engineering companies,” Lenzo says.