BIS Shrap­nel tips 23pc CBD vacancy rates

Kalgoorlie Miner - - NEWS - Perth

Perth’s al­ready over­sup­plied com­mer­cial prop­erty mar­ket is set to swell to peak lev­els if oil and gas gi­ant Wood­side signs up as the an­chor ten­ant for a planned new CBD of­fice tower.

That’s the find­ing of prop­erty fore­cast­ing company BIS Shrap­nel after it ex­am­ined Perth’s in­ner city mar­ket, with almost 160,000 square me­tres of re­fur­bished or new of­fice space due for com­ple­tion over the next cal­en­dar year.

If Wood­side be­comes the draw­card for a 55,000sqm of­fice tower at 98 Mounts Bay Road, the CBD vacancy rate will peak at a whop­ping 23 per cent in 2018.

The CBD vacancy rate is cur­rently about 14 per cent, dou­ble what it was 18 months ago, send­ing rents south. And the vacancy rate will likely stay in dou­ble dig­its un­til at least 2021 if Chevron pushes ahead with another ma­jor of­fice build­ing of about 70,000 square me­tres at El­iz­a­beth Quay around the end of this decade.

While almost two thirds of the space to be cre­ated next year has al­ready been snapped up, th­ese ten­ants will cre­ate a void be­hind them as they re­lo­cate from their ex­ist­ing build­ings.

Ac­cord­ingly, BIS Shrap­nel has fore­cast flat to neg­a­tive net ab­sorp­tion of CBD of­fice space be­tween now and 2018.

“The Perth CBD of­fice mar­ket does not need more ma­jor of­fice de­vel­op­ments,” the company said.

“Even if Wood­side and Chevron elect not to un­der­write their re­spec­tive of­fice tow­ers, it will take the CBD of­fice mar­ket un­til the end of the decade to re­cover from the over­sup­ply cre­ated by projects al­ready locked in.” AAP

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