The latest Office Vacancy Survey, sheds a degree of positive light on an office sector that continues to operate in a challenging market with vacancies generally above natural levels.
The national office vacancy rate stabilised somewhat in Q1 2012 following marginal yet steady growth over the previous four quarters. While this was only a very slight improvement of just 2bp and conditions for the office sector remain tough, it indicates that some nodes are showing improvement while overall vacancy rates may be beginning to level out.
Prime space continues to outperform lower grade stock, especially in prime decentralized nodes where most areas saw an improvement this quarter. The P grade vacancy rate is currently a low 1.67% while A grade space saw a marginal increase to 8.73%. The largest improvement was realised by C grade space which fell by nearly 2% to 16.41% in line with continued office-to-residential conversions and some demand for C grade space, particularly from call centre operators. The vacancy rate of B grade office space has remained relatively flat over the past two quarters and currently sits at 12.60%.
Source: SAPOA
