Hobart Office Market Report 2024
‘Heaven is a place on earth’ - Belinda Carlisle
This is not a quote you would generally associate with our office market, however there was a consensus from the panel at this months’ Property Council of Australia’s Hobart Office Market Report, that we have it better than anyone else right now.
With our office vacancy increasing by only a marginal 0.3% to 2.8% across Hobart’s CBD, when compared to all other capital cities, we are still the strongest office market. With no new supply projected, we find ourselves in an enviable position, prompting the question: do we require additional office supply at this time, or would it pose a risk of oversupply?
During periods of low vacancy rates, rents tend to rise, and there's evidence suggesting an annual increase of approximately 10%. Premium grade offices, in particular, are now demanding between $450 to $500 per square meter gross, with predictions indicating a potential crossing of the $500 per square meter threshold this year. Given tenants' inclination towards quality spaces, fostering open communication between landlords and tenants becomes crucial to achieving mutually beneficial outcomes during lease negotiations. By keeping tenants well-informed about current market conditions, landlords can better position themselves to renegotiate rents to align with market levels.
At MIX Property Group, we prioritise providing landlords with accurate and up-to-date market evidence, enabling them to devise strategies for achievable income growth and consider capital improvements that could further enhance this growth. Retaining tenants in such a competitive market requires a delicate balance, underscoring the importance of having expert property management services that prioritise landlords' interests.
Overall, while the office market may not be akin to "Heaven on earth," the current conditions in Hobart suggest a robust and promising landscape, ripe with opportunities for both landlords and tenants alike.
