New research shows Perth businesses are swapping suburban office space for the CBD – and many the new arrivals have nothing to do with mining. Photo: Philip Gostelow Will Perth’s skyline see a different kind of company signage in 2017? Photo: Daniel Carson
At the height of the boom in WA St Georges Terrace was a mining industry stronghold with sky high prices per square metre edging out anyone not digging or dealing.
But new figures collected by Perth-based Y Research show that’s changing fast.
Falling rents and fleeing mining companies have triggered a wave of relocations with Perth businesses swapping suburban office space for swanky digs in the CBD.
The company’s latest Suburban Office Report for WA shows the vacancy rate across Perth’s 50 suburban office markets has risen over the past 12 months from 14.6 per cent to 16.5 per cent, fuelled by relocations to the CBD.
As miners like Rio Tinto continue to downsize their city-based operations or shut up shop to adjust to the post-boom economy, companies like industrial group thyssenKrupp, marketing giant 303 Mullen Lowe and urban planner Taylor Burrell Barnett are moving in to the CBD take their place.
There’s also a raft of education, technology, aged-care, medical, co-working and not-for-profit businesses moving into the heart of Perth, changing the face of the city’s usual business crowd.
Y Research’s Chief Problem Solver Damian Stone said right now Perth was most definitely a tenant’s market and landlords were watching closely to see if the trend peaked or troughed in 2017.
“The impact of competition from major CBD owners, able to offer incentives and building services beyond what a majority of suburban office owners can offer, will determine whether 2017 is the end of higher suburban vacancies or the beginning of a multiple year raid on Perth’s suburban employment hubs,” he said.
“Current and future vacancies in the Perth CBD offer suburban tenants space largely not available in existing suburban markets – in terms of building quality and contiguous spaces available.”
In 2016, seven Perth suburbs with key office space hubs recorded more than 1,000 square metres of unoccupied office space including Herdsman, Subiaco, Belmont and Northbridge.
If this sign of the times becomes more of a fixture, Mr Stone said suburban commercial landlords would have to dig deep to retain their clients.
“For suburban office owners, the ability to retain and attract tenants for new development and existing buildings, in competition with the CBD and West Perth, will be a key challenge in the months ahead.
“If you are a tenant of scale in Adelaide Terrace, Applecross, Ascot or Armadale you can expect to hear from your building owner or agent as well as from competing offers.”
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