Perth’s commercial property market is booming as the city heads into transformative era, according to Knight Frank’s outlook on Western Australia.
Driven by investor sentiment in the city’s office market and underpinned by an extremely buoyant natural resources industry, Western Australia tipped to become one of the top performing states for commercial real estate over the next 24 months.
Knight Frank Chief Economist Ben Burston said interest comes as the Perth CBD prepares for a transformation, with the boundaries of the city being expanded with the relocation of the Edith Cowan University.
“There has been a shift in the tone from corporate leaders since the beginning of the pandemic and the vast majority have realised that the office remains critical to their business, so we are seeing increasing numbers of employees returning to our traditional employment centres, including in Perth,” he said.
“However, the pandemic will influence the form and function of the workplace, with a greater focus on customer service, user experience and amenity.”
Mr Burston said the relocation of the Edith Cowan University (ECU) in Perth was expected to result in an expansion of the CBD, triggering additional development in the northern fringes.
“This new development will act to expand the boundaries of the traditional office market and improve the connection between the CBD and the vibrant Northbridge precinct.
“This area will be a hotspot of activity moving forward, and will be watched by investors with great interest.”
Knight Frank Head of WA Craig Dawson said the relocation of the University was one of the major fundamentals supporting economic growth in Perth moving forward, and would transform the city’s CBD.
“We are well and truly in recovery mode, with the WA economy continuing to growth strongly, and the commercial property market gathering pace, both in terms of office leasing and investment sales growing.
“Our latest research on investment sales found volumes for Q4 were in line with the 10-year average, despite volumes over 2020 being the lowest level in a decade.
“In the office leasing market deals are occurring at all levels. Smaller tenants are actively leasing in the CBD and fringe markets and larger corporate requirements have come back into the office market. There is also an active and exciting pre-commitment market including government and major corporate tenants.
“On top of this we can see that we are heading into a transformative era, where we will see significant change in the CBD particularly, which will make the Perth market even more attractive for investors moving forward.”