The sun is starting to shine over Perth’s commercial sector with fewer properties on the market, and the number of empty lots is down.
Ray White Commercial’s latest research shows that Perth’s threat of economic growth over the past few years is starting to take effect, head of research Vanessa Rader said.
“While gross state product levels have improved, aided by the uptick in commodity prices and growth in exports, employment growth has been improving at a limited rate,” she said.
Low-interest rates have helped small businesses, but an increase in population is needed to boost the vibrancy of the city economy, Ms Rader said.
This is the third straight year the city has seen positive net absorption in sub-5,000 square metre commercial land, Ray White’s Chris Matthews said.
“The north precinct has enjoyed the greatest take-up over this period and now accounts for 38.89 per cent of stock compared to 41.98 per cent 12 months ago,” he said.
“The standout performer being the smaller size range 0–500sq m, which now represents 43.48 per cent of total listings, down from 53.88 per cent two years ago.”
Additionally, with few properties on the market, there has been a decrease in vacancies.
“Canning Vale, Welshpool, Belmont, and Kewdale have all reduced their number of vacancies, notably in the smaller size range for growing local businesses as well as tenants looking to upgrade into quality accommodation during this ‘tenant market’,” Mr Matthews said.
“It’s been an exciting time for the Perth industrial market; although vacancies remain high, rents look to have reached their bottom.
“An uptick in leasing activity during 2019 has seen some slight upward change in net face rents for prime assets, albeit only very limited, while after some further stock absorption, secondary rents are likely to follow slowly after with some lag.”