Darwin CBD’s office space vacancy rate has crept up to near 20 per cent over the year due to a drop in government demand and significant supply additions, the Property Council of Australia NT has said.
“It’s not good – it has increased again so year-on-year, we do seem to creep up,” the Property Council’s NT director Ruth Palmer told ABC Radio Darwin Thursday morning.
“Last year, it did come down a little bit, but at the moment we are sitting at around that 19.7 per cent [mark], near that 20 per cent mark of vacancies.
“To put that into some numbers, there’s around 44,000 square meters of vacant space, just in the CBD. So, that’s 44,000 square meters of space that we need to try and fill.”
Ms Palmer said the NT Government usually takes up the overwhelming majority of CBD office space, but new buildings have taken that demand away from existing properties.
“Largely, it’s due to the [NT] government tenancies,” Ms Palmer said. “The government takes up around 80 per cent of the rental leases around the CBD so when you get movement around town or new buildings that come on, it does create some holes and some pockets of empty buildings.”
According to the council’s audit released Thursday, results indicate that Darwin is seeing pockets being filled up in better quality buildings, leaving the C grade buildings at a concerning 56.4 per cent vacancy.
“We already knew that there was to be approximately 12,000sqm of space to come online from the end of 2020 onwards,” Ms Palmer said.
“The movement of health employees into Manunda Place has left a gap in office space with ‘Health House’ now unoccupied.
“Just to put it into perspective in a numbers game, Hobart has around 200,000 people in their CBD, but they’re at 5.1 per cent vacancy. We’re about four times higher vacancy than what they have with around 135,000 people in the CBD so that is a big difference between what Hobart’s vacancy is to where Darwin’s vacancies (are).”
Ms Palmer said the NT Government should look into cutting red tape to bolster construction, retail, hospitality, and tourism in the CBD. She also stressed that it is difficult to activate buildings when the NT’s population is consistently declining, something recent ABS figures showed had improved slightly last year.
“[It’s] not going to be something that can be fixed overnight so it will be a conversation that needs to happen [and] we have been having those conversations, so it will be something that will be further pushing this year,” Ms Palmer said.
“Taxes and levies don’t encourage investment and they definitely will not improve the performance of the CBD. We believe it will further deteriorate the market.
“Keeping the Cities Deal moving is also a major priority in activating vacant spaces, along with a stronger economy and a population growth,” she said.
Hey Ruth.
Whats the rent per square metre being paid by ntg for the NAB building ,Mitchell Centre and Goyder Building in Palmo?
It is so exorbitant that nobody belivies the numbers?