Investor Presentaiton
Australian Commercial Market
Perth CBD office
FRASERS
LOGISTICS & COMMERCIAL
TRUST
◆ Supply: Development activity in the Perth CBD has been subdued with no new developments being completed in the last 12 months. There are currently two major new developments under
construction in the Perth CBD, Chevron HQ and Capital Square Tower 2. The two developments are expected to be completed in 4Q 2023 and 4Q 2021 respectively and will provide approximately
79,200 sqm of commercial space to the Perth Market. Due the persistently high vacancy rates in Perth there is unlikely to be any additional developments added to the supply pipeline.
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Demand: Tenant demand has remained subdued with Perth CBD experienced negative net absorption of 2,600 sqm. Tenant enquiry has begun to pick up particularly for fitted out B-grade office
accommodation. The new enquiry is primarily driven by the mining and professional service sectors. The WA State Government remains an active player in the market as it continues to review its
office space requirements.
Rents: Despite softening demand, prime rents in the Perth CBD remained stable over the previous 12 months. The average net prime rents in the Perth CBD are currently A$625/sqm. Over the
quarter incentives for prime office space have also remained stable at 49%. The high-level of incentives is due to continued high vacancy rates and modest tenant demand in the Perth CBD office
market.
◆ Vacancy: During 1Q 2021 the vacancy rate in Perth CBD increased slightly to 20.16%. Currently, there is approximately 364,401 sqm of vacant commercial space in the Perth CBD market. Vacancy
rates are expected to decrease as demand from the mining and professional service sector are expected to increase over the next 12 months.
('000 sqm)
160
140
80
60
20
༄ ༈ ༄ ¥ 8 °
120
100
Perth CBD Office Total Supply
(A$/sqm/yr)
Perth CBD Office Prime Grade Net Face Rent
800
$747
$722
750
$701
700
$660
$635
650
$621 $617 $621 $625 $625
600
550
1Q12 1Q13 1Q14 1Q15 1Q16 1Q17 1Q18 1Q19 1Q20 1Q21
1Q12 1Q13 1Q14 1Q15 1Q16 1Q17
1Q18
1Q19 1Q20 1Q21
Completed
10-year annual average
Annualised as at 1Q21
Sources: Jones Lang LaSalle Real Estate Intelligence Service - Perth CBD Office Final Data 1Q21; Jones Lang LaSalle Real Estate Intelligence Service - Perth CBD Office Snapshot 1Q21;
Jones Lang LaSalle Real Estate Data Solution - Perth CBD Office Construction Projects from Q2 2011 to 1Q21.
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