Absorption Over The Years
Office Absorption has changed a lot in the office markets over so many years. The covid era simplified matters and shaped the way office absorption has happened since its start.
We look at PCA office absorption for the 5.5 years up to and including January 2020 (pre-covid), and the same period since that date:
Sydney and Melbourne have a long way to go to reach the absorption levels prior to Covid. Both of these markets also happen to be the ones with the biggest tenants, the most back office, and the largest WFH proportions.
In that 5.5 year period up to January 2020, Sydney’s absorption was close to its long term average and Melbourne’s was almost double. Since January 2020 average absorption in both has remained negative.
Brisbane and Adelaide have returned to normal, with things close to the long term average; a healthy sign.
Perth looks like it may be lagging but that is only a 5,000 m2 difference. We attribute this to the slow reduction in office space of a handful of super miners.
Canberra’s absorption since January 2020 looks huge relative to the period up to January 2020. But this absorption is effectively average, meaning absorption prior to Covid was very subdued.
Over the last several weeks we have shown how office absorption fluctuates, but when ironed out follows a pattern. Some cities share similar patterns, but ultimately each city is unique in its own way.
The few certain things are, de-densification continues, history rhymes, and the way forward is always up for discussion.
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