Office tenant demand rose 1% on average across Australia’s CBDs with every capital city except for Sydney and Brisbane.
The national vacancy rate increased 0.2% during the six months to January 2022, driven by an increase in supply of office space coming onto the market, according to the Property Council of Australia.
Property Council of Australia Chief Executive Ken Morrison said the figures illustrated that the office was alive and well in today’s economy, even as the pandemic changed how we use workspaces.
“While many expected this once in 100-year global pandemic to cause a major spike in office vacancy, these figures show that hasn’t eventuated,” he said
“While aggregate vacancy levels have risen slightly from 11.9% to 12.1%, the driver of this has been new supply of office space, not a drop in demand.
“The reality is that most CBD businesses continue to see the office as integral to their future, and that is reflected in the increased demand for office space over the past six months.”
He said the comparison to the 1990s recession was stark.
Morrison said vacancy rates blew out by a massive 15.6 per cent over three years during the 1990s recession crisis, whereas they had shifted only 3.3% during the two years of the COVID-19 pandemic.
“The supply of office space across Australia has been above the historical average in three out of the last four reporting periods, which means since the onset of the pandemic, office developments have continued to come online, and demand for it has largely kept up,” Morrison said.
“The data matches what we’re hearing, and that is that tenants clearly see collaborative and well-designed office space as a key component of their ‘new normal’ of working.”