Demand for office space falls across August: BIS Shrapnel

The underlying demand for office markets fell in August 2014 to just 125,000 square metres nationally, according to BIS Shrapnel’s latest statistics.

The decline that had been expected by BIS Shrapnel has seen underlying demand remain modest in recent quarters and far below the long-term average.

The 10-year average demand is 660,000 square metres.

Source: BIS Shrapnel

Net absorption may, however, improve, according to senior project manager Maria Lee.

“Underlying demand is usually a lead indicator of net absorption (the change in occupied floorspace from one period to the next). We haven’t yet seen the improvement in underlying demand after the slump in 2013 fully feed through to net absorption. As such, we should see net absorption move back into positive territory by the end of 2014,” said Lee.

She noted that underlying demand is expected to pick up in the November 2014 quarter as the November 2013 data drops out of the calculation.

Employment, obviously a key data set for individual industry areas, has seen property and business services rebounding, a decline in public administration and safety, and stability in the financial and investment services sector.