WA Woes Hit Perth Industrial Leasing Market
Western Australia’s economic woes continue to plague Perth’s industrial leasing market with more than 1,000 vacant properties across the metropolitan area, says Ray White Commercial.
Vanessa Rader, Head of Research for Ray White Commercial, said there were 1,012 sub 5,000 sqm properties totalling 790,488 sqm available for lease in Perth as the WA economy battles the resources downturn.
“The Perth industrial market has been hampered by high levels of vacant stock which has put pressure on both the investment and leasing market,” Ms Rader said in the Between the Lines, Perth Industrial Sub 5,000 sqm Leasing Market report.
“The interest in purchasing property by SMSF’s looking to divest their investments during this low interest rate environment has also stalled, while owner-occupiers are looking more to favourable longer term leasing options during this time of compression in capital values.
“However, new supply completions have come to a halt, encouragingly allowing the take up of this existing glut of vacant space.”
Ray White Commercial (WA) Managing Director Russ Parham said northern Perth has the greatest number of vacancies (532) or 367,561sqm, with Wangara, Malaga and Osborne Park the worst affected suburbs.
Russ Parham said the eastern suburbs have 204 vacant spaces although the area has strong representation of the larger space users with approximately 50,000 sqm available in the 1,500–5,000 sqm size range.
“The south features the lowest vacancy in the region, sub 200,000 sqm, with more than half the vacancies in the sub 500 sqm size category,” he said. “The 500–1,000 sqm range is strongly represented with 65 properties totalling 47,250sqm.”
Ray White Commercial (WA) Sales and Leasing Manager Stephen Harrison said the face rental position across all metropolitan regions has experienced steady declines over the past three years.
“The south continues to be the most affordable location with current prime net face rents at $95 per sqm, which is a 6.30 per cent decline over the past year or 8.87 per cent in the past two years,” he said.
“The east recorded a fall of 4.65 per cent over the last year while the north continues to demand the highest prime net face rents in the region despite it being home to the greatest volume of vacancy, with average rates at $105 per sqm.”