The Property Council of Australia’s Office Market Report recently released has shed some light on the changing profile of the CBD and non-CBD office markets across Australia. The post-COVID-19 economy has been particularly challenging for some office locations, with many staff continuing to work from home. This shift has changed the nature of new take up of space and movement across regions.
The two largest areas hit by this change are Sydney and Melbourne’s CBDs, which have recorded negative net absorption and increased vacancy rates to 11.3% and 13.8% respectively. On the other hand, cities that were not subjected to stringent lockdown measures, such as Brisbane and Perth’s CBDs, remain positive with regards to space take up thus resulting in an improved occupancy rate.
Additionally, people are increasingly moving out of city centres into growing employment hubs that follow population growth trends, indicating a wider pattern across Australia’s property industry. Here’s what the report found for local markets.
The high population growth in Queensland is having a positive impact on the office market across the State. Brisbane Fringe recorded the second highest net absorption of all Australian office markets with 63,625m², making it the largest non-CBD office market in the country at over 1.3 million m² in stock. The region is improving due to people’s changing preference for parking and affordable, quality accommodation options.
Meanwhile, Brisbane’s CBD – the fourth largest one in the whole country – has recorded the greatest take up rate within the last 12 months with current vacancies sitting at 12.9% (lower than its 10 year average of 14.3%). This can be attributed to an increasing employment demand from population growth as well as businesses looking to expand or fill existing stock.
The Sunshine Coast and Gold Coast are also two strong performers that have both seen their vacancy rates falling to record lows due to population growth and new business starts. The Sunshine Coast vacancy rate currently sits at 4.0% while Gold Coast vacancy is down to 6.0% (the lowest since 2008). A-grade assets continue to be highly sought after due to limited new stock being added over recent years.