Australia’s office market showed strong growth rate in Q1 2022; Q2 to easily exceed 2021’s

The office sector remained the most popular in Asia Pacific in terms of overall volume

The Asia Pacific real estate market continued to grow in Q1 2022, with volumes up 20 percent year-on-year (YoY). Retail and office sectors performed strongly while logistics and industrial grew at a slower pace of 3.5 percent YoY, according to a press release by JLL.

The office sector remained the most popular in Asia Pacific in terms of overall volume, with AUD17.3 billion (USD12.1 billion) in direct investment at the end of the first quarter, up 9 percent YoY.

Australia had the third-highest yearly investment growth rate (up 49 percent) as investors deployed AUD4.7 billion (USD3.3 billion) into the market, focusing on office spaces.

According to Knight Frank, office investment volumes in 2022 are expected to easily exceed last year’s, and office investment in Sydney, Melbourne, Brisbane, Perth, Adelaide, and Canberra remains strong.

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Justin Bond, Knight Frank National Head of Capital Markets, said Melbourne is expected to see a solid year as it has the most stock on market of any city; Brisbane remains one of the most active Australian markets; and Perth is slated to benefit from the reopening of borders.

Meanwhile, the Canberra office market records a fourth successive quarter of positive net absorption in Q1. 

In a research conducted by JLL, the national CBD market showed positive net absorption of 14,200 sqm in Q1 2022 and 163,300 sqm over the 12 months to March 2022. The national CBD office market vacancy rate contracted by 0.2 percentage points to 13.5 percent in Q1 2022. Canberra’s headline vacancy rate fell to 5.5 percent, the lowest since 2008, due to strong demand.

“We saw an increase in office leasing activity in Q1 2022, particularly in March. We have seen a 29 percent increase in Tenant Representation briefs coming to market YTD compared to January-March 2021, with a 117 percent increase in demand from Feb-March recording 13 briefs in March for 23,425 sqm of space. The public sector continued to drive leasing demand in Q1 2022, with the ACT Government fully occupying significant preleased space,” said Andrew Balzanelli, JLL’s Head of Office Leasing – ACT.

The Property Report editors wrote this article. For more information, email: [email protected].