- One of Australia’s largest office landlords is forecasting a rosier outlook for the nation’s CBD office markets than previously indicated
- In its latest Investa Inside: Office Market Outlook Investa reports that a range of leading indicators point to a nascent recovery in office market conditions despite a wider embrace of working from home creating a 5 to 10 per cent drag
- The report noted that these trends, and other shifts in tenant preferences, are expected to strengthen a ‘flight to quality’ in tenant leasing activity and drive outperformance in Australia’s higher-quality office buildings
- Perth’s tallest building, Central Park, is set to undergo a $18.9 million makeover to enhance the user experience
- Investa said COVID-19 has not significantly impacted office construction activity across Australia’s capital city market, despite some easing in office development approvals
One of Australia’s largest office landlords is forecasting a rosier outlook for the nation’s CBD office markets than previously indicated.
In its latest Investa Inside: Office Market Outlook, Investa reports that a range of leading indicators point to a nascent recovery in office market conditions despite a wider embrace of working from home creating a 5 to 10 per cent drag.
“A rebound in business conditions and confidence, combined with recent growth in economic activity and employment, presents a positive outlook for Australia’s office occupying businesses,” Investa Head of Research David Cannington said.
“There are still some COVID-related challenges to navigate, particularly for businesses dependent on inbound international tourism and migration. On balance, Australia’s white-collar businesses have fared comparatively well through 2020, and are well positioned to expand through the post-COVID recovery,” he added.
One issue Investa has analysed in presenting its outlook is estimating the impact of the new ways of working on future office leasing demand.
Investa’s analysis concludes that the net impact of increased working from home and greater use of office space for team-based work is expected to create a moderate softening in future office demand when compared to pre-COVID forecast assumptions.
“There are a number of moving parts that will impact future office demand, Cannington said. “Some will moderate office demand and some will increase a business’ space requirements,” David continued.
“By far, the most significant driver of underlying demand for Australian office space will continue to be economic conditions, with office-based employment expected to account for approximately 60-65 per cent of the total change in occupied office space across Australia’s major CBD markets to 2023,” he concluded.
The report noted that these trends, and other shifts in tenant preferences, are expected to strengthen a ‘flight to quality’ in tenant leasing activity and drive outperformance in Australia’s higher quality office buildings.
Perth’s tallest building, Central Park, is set to undergo a $18.9 million makeover to enhance the user experience.
Central Park General Manager Tim Ward said that the value of investing into the design and innovation of an office building is paramount to meeting the expectations of today’s workforce and creating a premium businesses environment.
The building’s tenants include Rio Tinto, WeWork and Grant Thornton.
Investa said COVID-19 has not significantly impacted office construction activity across Australia’s capital city market, despite some easing in office development approvals.
It noted that 12 major office development projects were completed across the nations CBDs in 2020.
According to the PCA Office Market Report January 2021, office vacancies across the nation’s CBDs was 11.1 per cent.