Commercial market needs to diversify
I attended the Property Council lunch last week which outlined the status of the Perth office market.
While vacancy rates are currently at 16% with projections that it could reach as high as 23%, the news still has a positive spin.
Interestingly, the Perth office market has grown steadily over the past 24 years, but we have held all our hopes on a one horse race – that is the mining sector.
Graphs shown be Deloiite clearly showed that mining began to play a major role for the WA economy in the 1980’s and we subsequently have ridden that high without then thinking about growing other sectors of our economy.
However with all the building works occurring at The Springs, Elizabeth Quays and Waterbank, what is clear, is that Perth is now moving into a new era – and quite frankly I am excited!
While we have been somewhat remiss in building our economy so that it is robust, now is the time and Deloitte predicted that there were five key markets that they believed would fuel WA’s future including gas, tourism, agribusiness, health, international education and wealth management.
The beauty about building these sectors is that there is obviously spin off industries including gas processing and transport etc.
However what this means is that we have to stop relying on the mining sector to be our saviour and actually take some control of where we take our economy – and that takes decisive action from the private and public sector alike.
This next ten year phase is definitely therefore about taking Perth to a new standard and with 150,000sqm of office space coming onto the market, there is no doubt that companies will look favourably at relocating into newer spaces at more competitive rates.
And if you happen to be holding onto older stock, now is the time to invest and be creative with how you may attract major sectors such as education into the CBD.
But if you stay still then you will undoubtedly suffer.
The writing is on the wall – so make some sound decisions and stay ahead of the pack – or otherwise you will find the next phase of Perth’s evolution will undoubtedly eclipse you!