Government Space
On Tuesday, I had the pleasure of presenting an overview of the Australian CRE markets at the CoreNet Global Government Forum in Canberra. It was a great opportunity to share views at a forum focused on the largest office tenant in the country.
In preparing for the talk, I set out to understand how much office space all levels of government occupy across Australia. The answer? A lot. For the purpose of this presentation, I focused on the six major CBDs – not to exclude other markets where government is accommodated, but to provide a clearer overall perspective.
None of the statistics provided the specific answers sought. So, numerous calls were made around the country to ask the question: as a percentage, how much office space does government occupy in your CBD?
Ultimately, there were many different estimates and figures. If we all knew the precise answer, the calls would not have been necessary. After considering the various estimates and making a judgment call, I arrived at a rounded figure of 4.6 m² in the 6 major markets, which is approximately a quarter. This makes the government, as a group, the largest office tenant in the market by far.
The more interesting part of this exercise was not how much space is occupied but which way that occupancy is trending. As it turns out, the country’s largest tenant is slowly reducing its footprint in the 6 major cities. Sydney CBD is the only exception because it is the only major market with a substantial second CBD, Parramatta, which accommodates a large portion of the state government. Any reduction would be more noticeable in Parramatta than in the Sydney CBD.
What sort of impact is this going to have on the markets? In time, we will keep you posted.
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