Commercial Office Demand Soars In Hobart
Thanks to a growing demand in the Hobart commercial market, the Tasmanian capital is seeing an influx of once consumer-based retail shopfronts being converted into commercial office spaces, facilitating the growing professional sector which is reflected in the property market.
The aftereffects of the Covid-19 pandemic hold a significant impact on businesses' property requirements, as the new ‘work-from-home’ model continues to alter the working landscape. Additionally, higher interest rates and soaring inflation adds another layer of complexity to the property market, forcing small business to revaluate their spatial commitments.
Despite the challenges, Devine Property’s Commercial Property Representative, George Wilkinson, identifies the strength within the commercial sector in Hobart, with less than a 2% vacancy rate requiring businesses to look elsewhere for office space.
"Retail markets have been somewhat struggling with longer vacancies and decreased amounts of demand, as discretionary spending is weakened with the interest rate hikes,” Wilkinson explains.
“Office markets are very strong with vacancy rates below 2.0% in Hobart CBD. We are now seeing a trend whereby retail shopfronts are being converted into usable office space. A good example of this done by Devine is S.Group Architects at 100 Elizabeth Street.”
The ground floor tenancy once home of Ettie's; a Tasmanian restaurant known for its fine wine and dining, is now the home of architecture and marketing firm S Group, who secured the 130sqm location in early 2023, and has since utilised the space as their commercial hub located in the heart of Hobart.
The commercial demand in the Hobart region sits in direct contrast with the trends occurring nationwide. As of January 2023, the national office vacancy rate is at a staggering 13.3 per cent, which is the highest rate since the mid 1990’s.
Given the demand in Hobart, Devine Property continues to excel in both the sale and leasing areas, having executed an array of high profiles transactions on both fronts. A comprehensive list of Devine’s property transactions can be found via the below links:
https://www.devineproperty.com.au/recently-sold
https://www.devineproperty.com.au/recently-leased
The Tasmanian capital’s strength in the market shows no signs of slowing down, as an influx of 47,000 people are set to arrive in the city over the next decade.
“We are still experiencing good amounts of consumer demand on the leasing front, with high levels of transacting across all asset classes,” Wilkinson concluded.
KEY TAKEAWAYS:
- Hobart office vacancy rate sits at 2%, as opposed to the nationwide 13.3%* via Australian Property Investor Magazine
- Businesses nationwide struggle to commit to tenancies due to the hybrid working environment largely coined post Covid-19 pandemic.
- High demand in the Hobart commercial market requires the repurposing of existing establishments.
- Hobart to experience a population influx of 47,000 within the next decade. Via the City of Hobart.