PERTH OFFICE MARKET REPORT - APRIL 2024

The Perth CBD and West Perth market have continued to be hampered by limited tenant demand keeping vacancies elevated in 2023. The Property Council of Australia has amended their boundaries of the CBD market in their recent release of data resulting in volatility in results which has seen Australia high levels of negative net absorption. Despite these results, Perth CBD enjoyed some vacancy compression highlighting leasing activity and improved vibrancy, ahead of other east coast office markets. West Perth continues to be one of the top performing non-CBD markets behind Queensland regions which have not been as impacted by the work from home issues seen mostly in Sydney and Melbourne office markets.

Vacancies, however, do remain high across these markets, for Perth CBD the continued construction of assets is putting further pressure on the existing market. While the quality of new assets in the Perth markets are of an international standard, the impact they have on occupancy, rents and incentives will add to the recovery time for the office market. This is highlighted by the limited sales activity recorded across the last 12 months, dominated by the private sector and sub $10million assets, highlights the current investment appetite and the increased yields.

Unlike most office markets across the country, Perth has not felt the same impact of hybrid working conditions as other locations. This has put the leasing market in good stead for this year, already recording some improvements in face rents across all quality grades.