Perth businesses could face tightening conditions in the city’s premium office market, with new analysis showing demand is set to outstrip supply for at least the next four to five years.
According to CCIWA Corporate Member Knight Frank’s inaugural The Tenant View report, while vacancy rates have remained elevated nationally, the window of opportunity for Perth tenants to secure high-quality space on favourable terms has narrowed.
Although Perth briefly “bucked the trend” with a lift in premium vacancy following the completion of No. 9 The Esplanade, the report noted the building was “80% committed on completion” and that the broader supply pipeline has tightened.
Perth’s new supply is limited
Unlike Sydney and Melbourne – which have several major projects to be completed between 2026 and 2028 – the report stated Perth had no significant premium developments scheduled in the short- to medium-term.
For Perth-based businesses, the implications were clear:
- Less choice in premium buildings coming online.
- Increased competition from large occupiers prioritising ESG-led, high-performance workspaces.
- Reduced negotiating power as incentives have begun to tighten.
The report forecasted that while A- and B-grade markets would remain comparatively tenant-friendly, premium spaces in core locations would become harder to secure.
Rising expectations: what employees want from modern workplaces
Nationally, businesses have continued to reshape their offices to support hybrid work, flexibility and higher expectations for amenity, with Perth being no exception.
The report highlighted the growing integration of workplace presence technology, desk booking platforms, and smarter utilisation systems – tools to help tenants understand how their space is used.
For Perth employers, these insights reinforced a shift already underway: investing in office environments that employees want to commute to.
Cost pressures and the need for early planning
With Australia facing sustained economic volatility and rising operational costs, the report revealed that cost reduction remained the biggest issue confronting commercial occupiers.
For Perth businesses approaching lease expiries or considering consolidation, delaying action could limit choices.
With limited premium stock arriving and existing high-quality space rapidly being absorbed, Knight Frank noted early engagement with leasing advisers were now critical.
What Perth businesses should do now
With market conditions tightening and workplace expectations evolving, the report suggested now is the time for Perth businesses to take a proactive, forward-looking approach to their office space needs:
- Start property strategy reviews early: With supply tightening, businesses should model future space needs now – particularly those expecting growth or seeking ESG-aligned buildings.
- Use technology to understand true utilisation: Data-driven insights on occupancy and work patterns help right-size space and justify lease decisions.
- Lock in favourable terms while conditions remain tenant-friendly: Higher incentives in A- and B-grade markets can reduce fit-out and operating costs but may not last as premium supply tightens.
- Prioritise employee experience in any relocation or redesign: Amenities, hybrid-supportive layouts and seamless tech integration are now baseline expectations.
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