Perth office rents grow 2.3% in Q2

Grade A rents increased by 3%.

According to a Colliers report, high take-up and rising costs have underpinned office rental growth in Perth. Premium net face rents have increased slightly over the June quarter to $757/sqm, growing by 0.25% and 2.3% over the past 12 months. A-grade rents have increased by 0.46% over the quarter to $654/sqm and 3.0% YoY. 

B-grade assets have experienced the most growth, increasing by 0.3% over the quarter at 3.2% over the year. Incentives have softened slightly over the year, with Premium grade incentives averaging 40%, Agrade averaging 44% and B-grade 49%.

Here’s more from Colliers:

Capital Square 3 is now complete and is available to lease with no new further developments expected over 2024. Nine the Esplanade which is currently under construction is forecast to be completed by 2025 and encompasses approximately 32,000 sqm of office space. Post 2025, there is a pause in new developments however there are several developments that have development approvals and are in the mooted phase. Similarly, to keep up with demand for higher-grade office space, many developments are undergoing refurbishment.

The new Perth CBD boundary which excludes East Perth had impacted the net absorption rate showing at -79,031 sqm of take-up. Without the impact of East Perth building withdrawals, there was a positive net absorption of 24,613 sqm. The latest Perth CBD vacancy rate dropped to 14.9% and the sub-lease vacancy rate remains low at 0.5%, showcasing Perth’s strong office market. 

According to the latest PCA figures (Jan-24) there was no sub-lease space available in premium grade offices highlighting the flight to quality thematic is still prevalent in Perth. Vacancy declines were apparent in A-grade, B-grade, and C-grade buildings.