by jbs081410d3 — August 20, 2010—The Property Council of Australia’s latest Office Market Report shows net absorption—the primary indicator of demand for office space—was 332,922m2 over the six months to July, almost twice the 20-year average of 171,350m2.
Despite this swift return to positive demand, the amount of new office space added to the market (also well above the 20-year average) saw total Australian office vacancy rise from 9.3 percent to 10.0 percent, the highest since July 1999. A total of 571,142m2 of new office supply was added to the market over the past six months, well above the 20-year historical average of 316,635m2.
“Such a swift rebound in demand for office space is yet another sign of the relative health of the Australian economy,” says the Property Council’s Acting CEO Ken Morrison. “After two years of low or negative demand, this is a surprisingly strong result. However with business confidence still patchy and continuing concerns about global uncertainties, there are plenty of reasons to remain cautious about the future.”
Morrison says the future office supply pipeline is slowing, with supply levels forecast to be much closer to historical norms. The Office Market Report shows a total of 327,721m2 of office space is to be added to Australia’s markets in the second half of 2010, in line with the 20-year average of 316,635m2. In 2011 a total of 404,071m2 is due to be added. The average historic annual supply average is 632,624m2.
