Market Analysis & Commentary
Office vacancy figures revealed in today’s Property Council Office Market Report provide a clear demonstration that the economic downturn is starting to bite in South Australia.
The report shows an increase in office vacancy from 3.4 per cent in January to 5.5 per cent in July in Adelaide’s Core Office Market.
Property Council of Australia (SA Division) Executive Director Nathan Paine says while this increase was expected, the South Australian market remains the second tightest in the nation and vacancies didn’t blow out to the same extent as other states.
“These results are not overly surprising and were expected in the face of the economic conditions.”
“Adelaide’s Core vacancy has increased, but in historical terms 5.5 percent is still very low in the range for this market,” Paine says.
“Clearly we have been affected by the Global Financial Crisis, however the impact has been felt less in South Australia than in other states due to limited redundancies.”
Paine says the biggest question mark now hovers over the capacity of the South Australian economy to absorb new stock additions in the order of 33,000 square metres over the next 18 months.
The big surprise in today’s figures was the decrease in the vacancy rate for the Adelaide Frame market, which plummeted to a record low of 2.3 per cent. Paine says this is a positive sign.
“This is a solid result and can be partially attributed to the extension of the tramline opening up new opportunities in the south of Adelaide’s CBD,” Paine says.
“I have no doubt that once credit frees up and the economy starts to grow strongly again that Adelaide’s office market will tighten further with new tenants entering the market to exploit our opportunities and natural advantages in defence, resources, education export and renewable technologies.”
Student ghetto rejected
A STUDENT housing development planned for the city's west has been refused approval because many of its apartments are less than half the required size.
Adelaide City Council's Development Assessment Panel refused consent for the project at its Monday night meeting, citing the size of the apartments and lack of open space and windows as reasons.
The House Brothers' proposal for the corner of Franklin and Gray streets features 24 two-bedroom and one-bedroom student apartments in a five-storey building.
The floor area of the two-bedroom apartments is just 30sq m – less than half the 75sq m requirement outlined in the city's development standards.
The one-bedroom apartments have a floor space of just 25sq m, only half the 50sq m limit the plan prescribes. The private open space provided for each apartment is 2.4sq m to 6.48sq m and also falls well below the minimum acceptable range of 8-11sq m.
Eight student accommodation complexes providing rooms for 1643 students have been built across the city since 2001.
A recent Education Adelaide study found more than 3050 international students were living in the Adelaide City Council area, an increase of 39.3 per cent since 2006.
Development Assessment Panel member councillors Anne Moran and David Plumridge were told to "temper" their language by the panel's presiding member Shanti Ditter after they described the complex as "the ghettos or slums of the future" and "suicide boxes".
"I just find this kind of accommodation very, very inferior," Mr Plumridge told the meeting. "The provision of accommodation is below a level I think is appropriate."
Ms Moran argued the same housing standards should apply for student accommodation as that applied to any other residential development in the city: "These are young people from other countries . . . (they) shouldn't be living in conditions that we would not want our children to live in."
Wayno wrote:Re. this article from the Advertiser, perhaps the ACCs Dev Plan needs adjustment to allow smaller sized student apartments. I'm not necessarily advocating a 2br apartments of 30sqm, but less than the ACCs minimum limit of 75sqm may be appropriate.
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