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WESTERN<br />
AUSTRALIA<br />
Perth continued to feel the effects of record<br />
high supply and low withdrawals.<br />
With vacancy of less than 1% in 2006 and 2007, the investment phase of the<br />
mining boom triggered a strong construction cycle in the Perth CBD office<br />
market. Between 2009 and 2012, 316,000 sqm of office space was added<br />
to stock. This was supported by very strong growth in office demand in 2010,<br />
2011 and the first half of 2012.<br />
Fast-forward to 2015, and the Perth office market is in a very different place.<br />
Vacancy has risen steadily since 2012, currently at 19.6%, with negative<br />
net absorption of 42,000 sqm recorded in 2015. With the transition from<br />
the construction to the production stage of the mining boom well and truly<br />
under way, and decade-low iron ore and oil prices, the impact is being felt<br />
by tenants in the Perth CBD office market.<br />
Contractions and consolidations by mining companies, engineering firms,<br />
and businesses servicing the resource industry have impacted heavily on<br />
vacancy, with this trend expected to continue through 2016. An additional<br />
149,000 sqm of office supply entered the market in 2015, the highest year<br />
of supply additions since 1982.<br />
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