Last month, the Property Council revealed new data that shows Adelaide’s CBD office vacancy rate has fallen for the second time in one year from a country-wide high of 19.3 per cent 12 months ago to 16.4 per cent today.
InDaily reported “Vacancy has continued on a downward trend according to the Property Council of Australia, which said 66,049 square metres of office accommodation was brought online over the past year”.
The experts at Broadway Property have kept a watchful eye over the market and now breakdown the several key impacts on the commercial property market in Adelaide.
Increased demand
The falling vacancy rate directly indicates a rise in demand for office space within Adelaide’s CBD. This can be driven by factors like business growth, new companies entering the market, or existing businesses expanding.
Rental price increases
As demand rises and available space decreases, landlords gain leverage. This typically leads to upward pressure on rental prices for office spaces.
Property value appreciation
Higher rental income and increased demand contribute to the overall value of commercial properties. This can have a positive impact on property values within the CBD.
Landlord benefits
Existing landlords benefit from increased rental income and potential property value appreciation. This can improve their returns on investment.
Development opportunities
The reduced vacancy rate can encourage developers to invest in new office space developments. This could lead to the construction of new office buildings or the redevelopment / repositioning of existing buildings.
Challenges for businesses
Businesses seeking office space may face increased competition and find it more challenging to secure suitable premises. This could also result in higher rental costs for businesses.
Increased competition
The reduction in available space will lead to increased competition between businesses for the available office spaces.
The declining vacancy rate signals a strengthening commercial property market in Adelaide’s CBD, with positive outcomes for landlords and developers, but potentially increased challenges for businesses seeking office space.
If you’re wondering how this affects you and your business, speak to the experts at Broadway Property, who can keep you informed and help you understand the market.