Office markets across the majority of Australia are remaining strong, with Sydney and Melbourne CBDs posting vacancies of less than 4 per cent, new research has found.
According to the Property Council Australian Office Market Report, office vacancy rates fell in five of the eight capital city markets surveyed, driven by strong demand coming from local tenants.
Melbourne and Sydney CBDs continue to lead the way with vacancy rates of 3.2 per cent and 3.9 per cent, respectively. However, other capital city markets, including Hobart, Canberra, Darwin and , reported declines in vacancy rates.
Meanwhile, Hobart’s vacancy rate has fallen to 4.1 per cent, Canberra’s has fallen to 10.3 per cent,, Darwin’s has fallen to 16.8 per cent and Perth’s has fallen to 17.6 per cent.
On the opposite end, office vacancy increased in the Brisbane CBD to 12.7 per cent despite historically strong levels of demand, as did Adelaide’s to 14 per cent.
“Our office markets are a great economic barometer of our cities, and these numbers show good demand for quality office space in most centres around the country,” said Ken Morrison, chief executive of the Property Council of Australia.
“Our tight markets of Melbourne and Sydney have remained super tight, and we have witnessed healthy demand for office space in most other markets.
“While the Australian economy has been growing more slowly, the underlying fundamentals of our office markets appear strong.
“Net tenant demand actually fell somewhat in Sydney and Melbourne over the past six months, but in such tight markets, it is difficult for existing businesses to grow or for new businesses to find space.
“Through 2020, over 680,000sqm of new office space will come onto CBD markets, with 80 per cent of this in Sydney and Melbourne where we need it most.”