Perth CBD Office Figures Q3 2024

Key Points: 

• Enquiry volumes softened during 3Q24 with c.61,000 sqm of tenant enquiries received for the Perth CBD, down 26% y-o-y.
• Gross new leasing volumes (for transactions ≥ 500 sqm totalled c.6,700 sqm, a decrease from the c.18,200 sqm recorded in the prior quarter. 
• Prime CBD net face rents increased 0.2% q-o-q to $693 (+2.4% y-o-y). Secondary grade net face rents were stable q-o-q (+0.3% y-o-y).
• Muted investment transaction activity with only two small assets having transacted this year as of 3Q24. Japan’s Yamamoto Realty acquired 181 St Georges Terrace from Charter Hall for $26.5m and 613-619 Wellington Street transacted for $9.8m.
• Prime indicative yields were stable q-o-q at an average of 7.27% (+9 bps y-o-y). Secondary midpoint yields were also stable q-o-q at 8.04% (+9 bps y-o-y).
• Net absorption recorded for 1H24 was -9,811 sqm (20-year annual average c.21,000 sqm). Prime grade net absorption for 1H24 was -3,300 sqm 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.