Figures from one of Australia’s largest property networks has revealed some surprising shifts in rental prices for office and industrial space across the country.
Despite the major reversal in fortunes for the Western Australian economy since the end of the mining boom, Perth office rents remain the second most expensive in the country, according to LJ Hooker Commercial.
An 11 per cent fall in the three years to 2017 has brought average gross face rent for prime office space to $770 per square metre – second only to Sydney. The latter saw the largest increase in rents over the same period, rising 14.4 per cent to $1,154.
Melbourne also saw strong price growth, rising 13.8 per cent. This was followed by Adelaide and Canberra, up 5.1 and 2.3 per cent respectively. Prices have remained flat in Brisbane, Hobart and Darwin.
In the industrial market, LJ Hooker’s figures show much greater discrepancies in rents. Hobart saw the largest growth, rising by 10 per cent in the last three years – taking average rents per square metre to $110, equal to Adelaide’s inner north and higher than those of Melbourne and Perth.
This contrasts starkly with Darwin and eastern Perth, where rents have plummeted by 17.9 and 14.6 per cent respectively.
Mathew Tiller, head of commercial at LJ Hooker, said that rental price changes have, for the most part, mirrored the economic fortunes of the respective state economies.
“Some have experienced sharp downturns in tenant demand, in line with economic fortunes, while others have seen business expansion,” he said.
However, Mr Tiller also noted that prices for commercial property across the board have been impacted by “a reduction in stock availability due to the increased rezoning of office and industrial land for residential development.”
The full breakdown of figures from LJ Hooker Commercial are as follows:
Australian office market
Average prime gross face rent ($psm): 2017, 2016, 2015; three-year percentage change
- Sydney: $1,154, $1,069, $1,009; 14.4 per cent increase
- Melbourne: $675, $614, $593; 13.8 per cent increase
- Brisbane: $655, $657, $659; 0.6 per cent decrease
- Adelaide: $511, $498, $486; 5.1 per cent increase
- Perth: $770, $810, $865; 11.0 per cent decrease
- Canberra: $436, $434, $426; 2.3 per cent increase
- Hobart: $380, $380, $380; no change
- Darwin: $580, $580, $580; no change
- National: $645, $630, $625; 3.3 per cent increase
Australian industrial rents
Average prime net face rent ($psm): Q2 2017, Q2 2016, Q2 2015; three-year percentage change
- Sydney outer west: $115, $113, $111; 3.6 per cent increase
- Melbourne south-east: $83, $82, $81; 2.5 per cent increase
- Brisbane TradeCoast: $123, $124, $127; 3.1 per cent decrease
- Adelaide inner north: $110, $110, $113; 2.7 per cent decrease
- Perth east: $88, $95, $103; 14.6 per cent decrease
- Hobart: $110, $110, $100; 10.0 per cent increase
- Darwin: $160, $195, $195; 17.9 per cent decrease
- Canberra: $135, $135, $135; no change
- National: $115.50, $120.50, $120.60; 4.2 per cent decrease