Unveiling the Renewed Optimism and Opportunities in Western Australia’s Commercial Property Sector
The first quarter of 2024 has brought a wave of optimism to the commercial property market in Western Australia (WA), as reflected in the NAB Commercial Property Survey. The survey provides a detailed analysis of the commercial property sector’s performance, highlighting significant trends and future prospects. Western Australia stands out as a region of notable improvement, with various indicators pointing to a positive trajectory.
Commercial Property Index
Western Australia experienced a substantial rise in commercial property sentiment, increasing by 29 points to +2 index points. This remarkable improvement is a testament to the growing confidence in WA’s commercial property sector. The positive sentiment is a strong indicator of future growth and investment potential.
Office Market Confidence
The office market in Western Australia showed a significant recovery, with sentiment improving by 41 points. This boost in confidence positions WA as a strong contender in the office property sector, second only to Queensland. The improvement in office market conditions in WA is a promising sign for investors and businesses looking to establish a presence in the region.
Capital Growth Expectations
Capital growth expectations for office property in Western Australia have also seen an improvement. WA is one of the only states with positive capital growth prospects, with expectations of 0.0% in the next year and 0.6% in the next two years. This positive outlook highlights the potential for long-term value appreciation in the office sector despite challenges faced by other states.
Rental Growth & Supply
Rental growth in WA’s industrial property market remained robust, with rents growing by 3.2% in Q1 2024. The forecast for the next 12 months and 2 years is even more optimistic, with expected growth rates of 2.4-3.5% and 2.7-3.1%, respectively. This strong rental growth is supported by very low vacancy rates, making industrial properties in WA highly attractive for investors.
Conversely, the office and retail rental markets faced challenges, with office rents growing marginally by 0.1% and retail rents experiencing a decline of 3.1%. However, the outlook for office rents in WA is expected to improve over the next 1-2 years, signaling potential stabilisation and growth.
Industrial Property Market
The industrial property market in Western Australia continues to show strong potential. With very low vacancies and robust rental growth, the sector remains a key area for investment. Capital growth expectations for the next 12 months and in 2 years’ time remained strong in industrial property markets (2.6% & 3.5%). The positive capital growth expectations and increasing rents make industrial properties a lucrative opportunity for investors looking to capitalize on WA’s thriving market.
You can read NAB’s full report here.
At Burgess Rawson, we take pride in having a dedicated team of property experts in Western Australia with extensive local market knowledge. Our expertise in the Western Australian market allows us to provide valuable insights and guidance to our clients, helping them make informed decisions. We offer a comprehensive suite of real estate services, including sales, leasing, asset management, and project marketing, all tailored to support your commercial property needs.
If you are looking to capitalise on the thriving commercial property market in Western Australia, we invite you to contact us here. At Burgess Rawson, we are committed to assisting you in achieving your commercial property goals.
