Weakness in the mining industry and associated service industries ontinue to result in negative demand for office space.

As a result, the vacancy rate has increased to above 20%, placing upward pressure on incentives and reducing rents. Tenants are taking advantage of the current leasing conditions to upgrade to better quality accommodation, including moving from the fringe to the CBD. The supply cycle is now complete, with no new major supply due until 2018, which should allow the demand environment to stabilise.

Highlights

  • 23,495 SQM
    Total Lettable area
  • $136 Million
    Book
    Value
  • 2.9 Years
    Weighted Average lease expiry

Outlook

Demand is likely to remain subdued as the market continues to adjust to challenging conditions in the resources industry

Upgrade activity to escalate as tenants make the most of market conditions

Potential for older, poor quality buildings to form a pool of structural vacancy with future demand likely to be concentrated in the Prime grade market

Property Map

PERTH
PORTFOLIO
Asset
value
Asset
weighting
1 66 St Georges Terrace $ 67.0m 2%
2 836 Wellington Street $ 69.5m 2%