Perth CBD office vacancy falls, but sales remain subdued
Perth CBD office vacancy fell to 15.4% in the third quarter of 2026, but stronger tenant demand has yet to translate into a broad recovery in investment activity, according to Cushman & Wakefield.
The firm’s MarketBeat report puts the previous vacancy rate at 16.9%. It also shows prime rents rising while office yields softened, highlighting the contrast between improving leasing conditions and a subdued investment market.
WorkZone East sale stands out
Castlerock’s $79.4 million purchase of WorkZone East from CorVal Partners provided a significant transaction in an otherwise quiet market. The report lists the property at 12,362 square metres and describes the sale as Perth’s largest office deal since 2022.
The report linked the sale to continuing investor demand for buildings with strong occupancy, longer average remaining lease terms and secure income. It cautioned that limited transaction evidence made the wider direction of pricing difficult to establish.
Premium yields rose from 6.44% to 6.50%, while A Grade yields increased from 7.69% to 7.85%, taking the average prime yield to 7.29%. B Grade yields were unchanged at 8.63%. Building quality, lease profiles and tenant financial strength continued to shape investment pricing.
Leasing improves across office grades
The report records six-month net absorption of 27,528 square metres, including 18,180 square metres for A Grade offices. Cushman & Wakefield attributed the stronger A Grade demand partly to the shortage of well-located Premium space, which was pushing occupiers to consider good-quality alternatives in core precincts.
A Grade vacancy fell from 18.9% to 16.3%. Premium vacancy declined from 11.1% to 10.2%, while B Grade vacancy dropped from 20.1% to 19.2%. Recorded leasing transactions included 3,500 square metres for Programmed at 226 Adelaide Terrace, 1,818 square metres for ASC at Australia Place and 458 square metres for Judo Bank at London House. The report excludes renewals from its leasing statistics.
At the time of reporting, no committed developments were scheduled. Cushman & Wakefield expected limited new supply to support further vacancy reductions, with larger contiguous spaces in prime buildings facing particular constraints.
Rental gains favour Premium offices
Across prime offices, which combine the Premium and A Grade categories, net effective rents rose 4.0% over the year to $398 per square metre annually. Premium rents increased 7.2% to $465 per square metre a year, compared with A Grade growth of 1.5% to $353.
B Grade rents fell 3.5% over the year despite improving demand. The report suggested landlords of secondary buildings were competing more heavily on price to attract occupiers, rather than sharing equally in the prime market’s rental growth.
Looking ahead, Cushman & Wakefield expected investment activity to remain subdued in the near term and said yields could soften further before stabilising. It said stronger leasing demand and lower vacancy could support a gradual improvement in investor confidence and transaction activity over the medium term.
SOURCE ATTRIBUTION:
Based on reporting by Cushman & Wakefield in MarketBeat: Perth CBD Office, Q3 2026.
