The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
URBANITY-25 FIRST RELEASE TICKETS ON SALE LIMITED AVAILABILITY
URBANITY-25 FIRST RELEASE TICKETS ON SALE LIMITED AVAILABILITY
SEE DETAILSDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Partner Lab
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
9
print
Print
OfficeRenee McKeownThu 04 Feb 21

Landlords Bank On Office Uplift

0fac944f-512d-4d7f-856f-cd14b1566a66

The negative trend in demand needs to be turned around in order to support new commercial space coming on the market according to the Property Council of Australia’s office market report.

Despite relative “insulation” from the pandemic, all CBD markets recorded an increase in vacancy except for Canberra.

This has pushed office vacancy to its highest level in 24 years for CBD markets and the highest level in 26 years for non-CBD markets.

Decade high office supply at 544,510sq m over the past six months further hampered results with a further 652,208sq m to be added in 2021.

Despite this, major property REITS including Dexus and Centuria expect the market to change course with indicators for office demand to improving sharply on six months ago.

Australian office vacancy

MarketJan 2021July 2020Jan 2020
Hobart CBD5.1%4.1%4.1%
Melbourne CBD8.2%5.8%3.2%
Sydney CBD8.6%5.6%3.9%
Canberra10.1%10.1%10.3%
Brisbane CBD13.6%12.9%12.7%
Adelaide CBD16.0%14.3%14.2%
Darwin CBD19.7%16.8%16.8%
Perth CBD20.0%18.4%17.5%
CBD Markets11.1%9.2%8.0%
Non-CBD Markets13.4%10.4%9.2%

^Source: PCA Australian Office Market Report, January 2021

Dexus research general manager Peter Studley said professional job advertisements, an indicator of corporate hiring intentions, were up 31 per cent on six months ago.

Meanwhile employment in white collar industries has grown by 2.5 per cent over the past 12 months

“After an uncertain year for office markets, an improvement in many of the key leading indicators signals a period of strengthening demand ahead,” Studley said.

“Capital flows into property are likely to remain strong during 2021 given the low interest rate thematic. ”

Centuria Office REIT fund manager Grant Nichols said the change in workplace requirements through the pandemic should boost non-CBD office markets.

“While working from home is still topical, we understand many workers want to be back in an office environment but not endure time consuming daily commutes, which compromise their work-life balance.

“Equally, many businesses, especially those affected by the pandemic, are conscious of cashflow and are actively seeking more affordable rents.

“These complementing themes highlight the desirability of decentralised office markets.”

Property Council chief executive Ken Morrison said with more office space due to come online in the CBD next year, it will be crucial for the wider economy that we reverse the current negative trend in demand.

“While it was not a surprise to see office vacancies increase in the middle of a pandemic, it is the new supply of office space that is responsible for three quarters of this impact, not reduced tenant demand,” Morrison said.

“Vibrant CBDs drive investment, growth and productivity and must be part of our national recovery planning.

“While vacancy rates for the six months to January 2021 are now the highest in some years, there is still strong interest in commercial property as evidenced in recent deals, particularly for premium CBD stock.”

OfficeAustraliaBrisbaneMelbournePerthAdelaideCanberrado not useDarwinSector
AUTHOR
Renee McKeown
More articles by this author
ADVERTISEMENT
TOP STORIES
High-density residential construction in Melbourne
Exclusive

Stabilising Conditions in Melbourne Bring Hopes of Improved Feasibility

Leon Della Bosca
6 Min
QBCC project trust accounts hero
Exclusive

Developers Warned as Commission Cracks Down on Subbie Pay Scheme

Clare Burnett
7 Min
Urban Infill site at Tonsley SA
Exclusive

SA Grapples with ‘Development Killer’ Carparking Law Changes

Leon Della Bosca
7 Min
Exclusive

Brains, Guts and Determination: How Salvo Property Shapes Melbourne’s Skyline

Marisa Wikramanayake
5 Min
Fraser and Partners founder Callum Fraser
Exclusive

Saving Our CBDs: Architect’s Blueprint Paves Way for Office-to-Resi that Works

Leon Della Bosca
8 Min
View All >
TZ Architects' render of the StoreLocal self storage facility at 50 Railway Street, West Perth in Western Australia.
Industrial

StoreLocal Unpacks West Perth Self-Storage Scheme

Marisa Wikramanayake AND Renee McKeown
Sponsored

Property Scholarship Offers Lifeline for Aspiring Women

Partner Content
High-density residential construction in Melbourne
Exclusive

Stabilising Conditions in Melbourne Bring Hopes of Improved Feasibility

Leon Della Bosca
Construction costs normalising, loan conditions improving, overseas money returning. Perhaps the sector has turned the c…
LATEST
TZ Architects' render of the StoreLocal self storage facility at 50 Railway Street, West Perth in Western Australia.
Industrial

StoreLocal Unpacks West Perth Self-Storage Scheme

Marisa Wikramanayake AND Renee McKeown
2 Min
Development

Property Scholarship Offers Lifeline for Aspiring Women

Partner Content
3 Min
High-density residential construction in Melbourne
Exclusive

Stabilising Conditions in Melbourne Bring Hopes of Improved Feasibility

Leon Della Bosca
6 Min
The underpass site in Southbank that the City of Melbourne plans to turn into a community park.
Community

Melbourne Moves Ahead on Overpass-to-Park Plan

Marisa Wikramanayake
3 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/bad-timing-for-new-office-supply