Number of full floors available in Adelaide has increased compared to last year: Savills
The recent Savills Prime Full Floor Availability Report indicates the state of the leasing market and is used to assess office stock vacancy in a different manner to most vacancy surveys.
The report graphically shows each Premium and A grade building, as well as top B grade buildings in the CBD on a floor-by-floor basis.
The report highlights which floors are available for lease in each building, now and in the near future, including those under construction and refurbishment.
The September 2016 Adelaide Prime Full Floor Availability Report results are detailed below.
Compared to September 2015, the number of full floors available has increased from 47 to 65 in September 2016.
Of the 65 prime floors, all are available for occupation within the next six months. All of this space is available for occupation as either direct or sub-lease vacancies.
Further options exist for tenants seeking B grade buildings, with 38 full floors currently available to the market.
The chart below tracks available space within prime office buildings as a percentage of the total prime office space in the CBD.
On a quarterly basis, the number of prime full floors available has increased from 57 in June 2016 to 65 in September 2016, representing 13.1 percent availability rate.
According to the Property Council of Australia (PCA), the Adelaide CBD office market vacancy rate increased in the 12 months to June 2016, reaching 15.8 percent, up from 13.5 percent in June 2015.
This is the highest vacancy rate since 1999, however not significantly higher than the five year average of 13.0 percent.
A similar trend has occurred in the Fringe office market. The headline vacancy rate in the Fringe increased from 8.0 percent in June 2015 to 10.2 percent in July 2016, according to the PCA.
There is an increasing gap between prime and secondary grade space, with A- Grade buildings recording a decline in the vacancy rate for the first time in two years.
The majority of the increase in the overall CBD vacancy rate at the tail-end of 2015 can be attributed to an increase in the availability of sub-lease space in A and B Grade buildings, however sublease vacancy now declined marginally during the first half of 2016.
Around 10,000 square metres of sublease space has been leased, while direct vacancy has increased. A and B Grade buildings are mostly responsible, with vacancy in both of these grades showing the largest movement in available space in the six months to July.
The return of refurbished space in 81-95 Waymouth Street recently, along with 50 Flinders Street and the partial return of 1 King William Street earlier this year, added almost 40,000 square metres of A Grade stock to the market.
While some of this has been absorbed through the relocation of PCCU and the Department of Environment, Water and Natural Resources, subsequent backfill and rationalisation of other space has placed some pressure on supply levels and thus the amount available vacant space in the market.
