An increase in vacant central city office space is a direct reflection of the fragile state of the South Australian economy says the Property Council of Australia.
The Property Council’s latest Office Market Report shows the percentage of vacant office space in Adelaide CBD hit 12.4 per cent in the six months to January 2014, eclipsing the national capital city average of 10.4 per cent.
“Vacancy levels must be taken as a wakeup call to both major parties in the lead up to the March State Election. The office market insight is a credible barometer and high vacancy numbers are a direct reflection of our current economic outlook,” says Property Council of Australia (SA Division) Executive Director Richard Angove.
Stubbornly high vacancies in the Adelaide CBD are due to a significant level of unoccupied secondary stock, running at 14.1per cent, compared to prime space, with an 8.4 per cent vacancy.
“With empty office space at its highest level in 14 years, the need to kick-start the economy is clear,” Richard Angove said.
“The Government must work with business to drive sustainable economic development that stimulates demand for white collar growth in the CBD. South Australia is a city-state. The success of the Adelaide CBD is pivotal to the success of the state at large.
“Unfortunately, increased vacancy levels are just one stumbling block our economy is facing. In order to create the conditions businesses need to expand the Government needs to facilitate a more robust partnership with industry.
“That is why the Property Council has released a comprehensive policy platform that hones in on jobs growth, taxation reform and financial innovation that, if adopted, will allow our economy to flourish.
“Innovative thinking is critical to allow our state to maximise its competitive advantages. If approached strategically, the ample supply of office space, coupled with incentives to improve the existing built environment, could see the CBD move into a new cycle of refurbishment.
“While the Report shows demand will continue to be relatively flat, there are plenty of opportunities for making the most of this slow-growth period. Driving future demand through innovative government and industry partnerships is central to that goal,” Richard Angove said.