West Perth office market tightening as mining boom drills into established stock
Perth CBD’s rental office space squeeze may be heading west.
Savills Research’s Spotlight on West Perth found that office vacancy rate there is 4.4% – down from 5.4% in January 2012.
In the year to March 16,027 square metres of office space was leased in the precinct, of which mining and utilities operations took up 75%, or 12,221 square metres.
Savills notes that West Perth had 4,124 square metres of office supply enter the market in the six months to December 2011, but there have been no further additions since.
“Larger mining firms, typically located in the CBD are now forced to look at smaller amounts of space available in fringe markets such as West Perth,” the report says.
Savills expects that available space will continue to drop in the secondary market, which could force second- and third-tier mining firms into alternative markets such as Subiaco, Herdsman and Applecross.
About 11,880 square metres of office space is under construction in West Perth.
Qube Property Group’s $70 million office building on Havelock Street is due for completion in December, and it is 50% leased to the Australian Financial Group.
“We are confident the balance of space in the building will be leased for about $2.7million by the time it is finished,” says Qube director James Collis.
Savills tracks sales over $1 million, and the group recorded $90 million worth of sales in two deals in the year to March 2012, which is a fall of 6% from $96 million in the previous year.
