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The inner-city area is enjoying its “biggest rental revival in a decade”, according to two directors.
Colliers’ Jemma Hutchinson, national director of office leasing, and Antonio Trimboli, associate director of office leasing, have highlighted that a number of big-name developers are now buying into the West Perth locale — and it’s thanks to the strength of the resources sector.
According to Ms Hutchinson, it’s led to “the sharpest vacancy decline in 10 years”.
Vacancy rates are now sitting at just 15 per cent, following the spike to 22 per cent vacancy seen in mid-2020.
“When the mining and resource sectors are strong, West Perth is strong,” she highlighted.
“These tenants are typically in mining services and junior mining tenants expanding their footprints.”
Even with the strong push present from resources, the real estate firm said there’s also been an influx of diverse tenants landing on the West Perth scene, thanks to mining tech, renewable energy and rare earth mineral tenants entering the marketplace.
The directors noted that increased interest over the past year had attracted some big investors, including Australian Development Capital led by Rod Hamersley and Adam Zorzi, who have paid $13.1 million for a three-level office building on Richardson Avenue.
They also touted interest shown by mining magnate Gina Rinehart, who spent $60 million for an Ord Street building in April 2022. That adds to Hancock Prospecting’s $11 million spend on 36 Ord Street and 27 Outram Street in October last year, which added to its Ventnor Avenue premises.
Colliers has also flagged a rumour that Ms Rinehart would be moving its Roy Hill operation premises from Perth Airport to West Perth.
All in all, Mr Trimboli said the area has been enjoying “strong levels of net absorption and a swift recovery after the lockdown period”, thanks in part to an underlying flight to quality as businesses look to woo staff back to the office through quality fit-outs.
With incentives on rent in West Perth now running at about 35 per cent — below the 50 per cent reduction in the CBD and net face rents now sitting between $300 per square metre to $380 per square metre, Mr Trimboli expects the trends to continue through to 2023, “when vacancies are set to continue to tighten” and continuing to put upward pressure on rents.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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