The effects of the pandemic is felt across all Australian office markets. Some markets are forecasting minimal signs of recovery until well into 2022, whilst other markets have a brighter outlook.
With the July 2020 Office Market Report revealing Canberra to be the only office market with a vacancy decrease over the six months to July 2020 (from 10.3% to 10.1%), it comes as no surprise the majority of surveyed industry experts in the Office Consensus Forecasts Spring 2020 believe Canberra will be the hottest market in the coming 12-months.
Canberra’s strong government tenant base, and consequent long leases and steady yields was reported as the primary reason behind experts believing Canberra to be the market most well-placed to ride out the downturn from the pandemic.
Canberra remains relatively unwavering against the current economic climate as most surveyed experts believe the future supply will drive demand. It is forecast that vacancy rates and incentives will increase slightly in the year ahead. Office yields are anticipated to remain unchanged over the next 12-months until mid-2022.
Contrarily, other Australian markets such as Sydney CBD and Melbourne CBD faces a challenging 12-months ahead with expectations of increased vacancy, upward pressure on incentives and tight yields on prime office stock.