Perth CBD Office Figures Q2 2024

Key Points: 

• 2Q24 enquiry volumes continued to rebound from the relatively quiet 4Q23, with total leasing enquiry volume of c.91,600 sqm (+19% q-o-q, -15% y-o-y).
• Gross new leasing volumes above 500 sqm was c.18,200 sqm in 2Q24 which improved significantly from the low level of c.6,200 sqm recorded in 1Q24. Y-o-Y gross lease volumes was up 23% on 2Q23.
• Net absorption for 1H24 was -9,811 sqm (20-year annual average c.21,000 sqm). Prime grade net absorption for 1H24 was -3,300 and secondary grade net absorption was -6,511 sqm.
• Muted net supply for 1H24 of 5,219 sqm as total supply of 39,732 sqm was significantly offset by stock withdrawal of 34,513 sqm. Notable supply additions include the new Capital Square Tower 3 development (13,681 sqm) and refurbishment of QV1 (21,306 sqm).
• Vacancy rate increased 80 bps h-o-h to 15.5% in 1H24 primarily due to the softer net absorption.
• Prime CBD net face rents increased 1.1% q-o-q to $692 (+4.8% y-o-y). Secondary grade net face rents were stable q-o-q (+1.2% y-o-y).
• Muted investment transaction activity with one CBD office transaction. Japan’s Yamamoto Realty acquired 181 St Georges Terrace from Charter Hall for $26.5m.
• Prime indicative yields were largely stable q-o-q at an average of 7.27% (+1 bps q-o-q, +30 bps y-o-y). Secondary midpoint yields increased by 4bps q-o-q to an average of 8.04% (+17 bps y-o-y).