Resources sector dominates Perth office market

The availability of office space in the Perth CBD continues to tighten dramatically, with demand from the state’s resources sector accounting for more than half of the city’s leasing profile, according to Savills. 

Savills research shows there are 66 full floors available for lease (now and in the future) in the Perth CBD as at September 2011, representing 6.7% of the city’s prime office stock. 

Of this, only 18 floors are available for occupation in the next six months, primarily comprising the sub-lease space available in BankWest Tower, 108 St Georges Terrace and Raine Square which is due for completion later this year. 

The number of full floors available has fallen from 93 floors in June 2011 and has consistently tightened from the peak level of 128 floors in September 2009. 

While the Property Council of Australia figures put the Perth CBD vacancy rate at 7.8% as at July 2011, Savills latest analysis indicates the market has tightened significantly to 2.8% for the September quarter. 

Paul Craig, Savills WA Managing Director, said WA is now entering an extended period of mining prosperity, evidenced by US energy giant Chevron recently giving the green light to its final investment decision on the $29 billion Wheatstone LNG project.

“The mining, utilities and industry sector now accounts for 55% of the Perth CBD office leasing profile. With over $170 billion worth of resources projects planned or pipelined for WA, many mining companies are looking for space to expand as their businesses grow,” Craig says. 

“This emerging period of mining prosperity in WA is expected to have the longevity unlike what we have seen previously. It has the potential to continue for another two decades and readjust the entire WA economy at a higher level.” 

Craig says the outlook for WA is extremely bright despite the economic uncertainties in the US and Europe. 

“We are now seeing a significant increase in investment interest in the WA commercial property sector,” he says. “Given the longevity of the state’s new mining projects and associated infrastructure, and the lack of new Perth CBD office supply, investors are recognising it is an ideal opportunity to enter the WA market.”