Latest / 360 with Katie Woolf / The Property Council's Ruth Palmer talks vacancy rates in Darwin against high demand

Transcript

The Property Council's Ruth Palmer talks vacancy rates in Darwin against high demand · 360 with Katie Woolf

• 0:00
  Speaker 1: We know that Darwin's office vacancy rate fell by two
• 0:03
  Speaker 1: point one percent over the last six months. It's apparently
• 0:06
  Speaker 1: been driven by high demand for premium working spaces. Now,
• 0:10
  Speaker 1: according to the latest office market report by the Property
• 0:13
  Speaker 1: Council of Australia, Darwin's CBD vacancy rate dropped to seventeen
• 0:17
  Speaker 1: point six percent in the six months to January, driven
• 0:20
  Speaker 1: by high levels of demand.
• 0:22
  Speaker 2: And we'll find.
• 0:23
  Speaker 1: Out a little bit more about what this all means
• 0:25
  Speaker 1: because joining us in the studio right now the Property
• 0:28
  Speaker 1: Council of Australia's Northern Territory branch.
• 0:31
  Speaker 2: Well joining us is Ruth Palmer. Good morning to you.
• 0:34
  Speaker 3: Good morning Katie.
• 0:35
  Speaker 1: Ruth. On the face of it, these figures look like
• 0:37
  Speaker 1: they're a really positive thing and seem to be bucking
• 0:41
  Speaker 1: the trend of what's happening in other states. What's you know,
• 0:45
  Speaker 1: Why are we in such a good situation at this point?
• 0:48
  Speaker 3: Thanks Katie.
• 0:49
  Speaker 4: Well, one of the major things that we need to
• 0:50
  Speaker 4: look at is our government tendancy takes up around eighty
• 0:54
  Speaker 4: percent of the CBD office market. So what we saw
• 0:57
  Speaker 4: through COVID and what we're still seeing now is that
• 1:00
  Speaker 4: the government workers are still in the buildings, so they
• 1:02
  Speaker 4: haven't had to leave the buildings with national.
• 1:05
  Speaker 3: Objective to actually have to work from home.
• 1:07
  Speaker 4: Or close up there there are office spaces, so we
• 1:10
  Speaker 4: are seeing that we still have that activity around the
• 1:13
  Speaker 4: CBD and those offices remaining open and there is that
• 1:17
  Speaker 4: demand for you know, the sort of better quality spaces,
• 1:20
  Speaker 4: if I can say. But what that does do is
• 1:23
  Speaker 4: it leaves our sort of lesser grade stocks, which is
• 1:26
  Speaker 4: you B and C grade still at around that fifty
• 1:29
  Speaker 4: two percent vacant, which is an issue we've held historically
• 1:32
  Speaker 4: for a very long time.
• 1:33
  Speaker 3: But if you can we still as much as we've.
• 1:36
  Speaker 4: Come down in those rates, we are still the highest
• 1:39
  Speaker 4: in the nation for our vacancy. So whilst we have
• 1:43
  Speaker 4: dropped that bit, we still need to be aware that
• 1:45
  Speaker 4: we are still holding that title well.
• 1:47
  Speaker 1: And it makes sense that when you say that, you
• 1:49
  Speaker 1: know the majority of that office space eighty percent then
• 1:52
  Speaker 1: taken up by government department. You go, okay, well, now
• 1:55
  Speaker 1: that makes sense because in other states and territory she
• 1:57
  Speaker 1: would see a lot of those those spaces within the
• 2:00
  Speaker 1: CBDs taken up by various different companies. For us here
• 2:03
  Speaker 1: in the territory, it is literally the government and they've
• 2:06
  Speaker 1: had to stay at.
• 2:07
  Speaker 2: Work, that's right.
• 2:08
  Speaker 4: And you know we've seen men under place really kicking
• 2:11
  Speaker 4: off as well.
• 2:11
  Speaker 3: You know, those floor spaces that they.
• 2:13
  Speaker 4: Originally had vacant have now been filled and that's where
• 2:16
  Speaker 4: you'll see that change in that a grade space around
• 2:19
  Speaker 4: that extra absorption of space.
• 2:21
  Speaker 2: What's it mean though?
• 2:22
  Speaker 1: Then for those other buildings that aren't sort of at
• 2:24
  Speaker 1: that premium level that aren't a grade space, you know,
• 2:27
  Speaker 1: what's it mean for them if they're struggling to fill
• 2:30
  Speaker 1: their space.
• 2:31
  Speaker 4: So this is the issue that we have had for
• 2:33
  Speaker 4: quite some time now. So this is a problem with
• 2:35
  Speaker 4: a lack of demand. So you know, this is around
• 2:38
  Speaker 4: encouraging people to want to come into the CBD, but
• 2:41
  Speaker 4: also for people wanting to come in and invest in
• 2:43
  Speaker 4: the Northern territory. It's very hard when we have seen
• 2:47
  Speaker 4: in the past and exodus of workers going out to
• 2:50
  Speaker 4: other areas around the top end. So that does obviously
• 2:53
  Speaker 4: leave a hole within those buildings that cannot be filled
• 2:57
  Speaker 4: because we don't have the sort of large corporate entities
• 3:00
  Speaker 4: you do see in the other states, like your superannuation funds,
• 3:04
  Speaker 4: the larger corporations like Charter Hall or Price water House Coopers.
• 3:07
  Speaker 4: They sort of take up entire office buildings. We just
• 3:10
  Speaker 4: don't have that demand here and we don't foresee that
• 3:13
  Speaker 4: sort of demand coming on anytime soon.
• 3:16
  Speaker 1: And so I guess the only way that you're going
• 3:17
  Speaker 1: to see that kind of demand come on anytime soon
• 3:20
  Speaker 1: is if you end up with more industry here in
• 3:23
  Speaker 1: the Northern Territory. Which really brings us to the next
• 3:26
  Speaker 1: part of the conversation, and that is the fact that
• 3:28
  Speaker 1: the Property Council has released the renewed population.
• 3:32
  Speaker 2: Plan this week.
• 3:33
  Speaker 1: Can you talk us through exactly what's in that and
• 3:36
  Speaker 1: you know what you've found?
• 3:38
  Speaker 2: I suppose, Yeah.
• 3:39
  Speaker 3: Thanks Katie.
• 3:39
  Speaker 4: So this is a report that we had been working
• 3:41
  Speaker 4: on for about eight months purely because the population planned
• 3:45
  Speaker 4: before was outdated. It was done in twenty eighteen, and
• 3:48
  Speaker 4: it was something we'd been sort of really strongly advocating for,
• 3:52
  Speaker 4: but we found that incentives were ineffective here in the
• 3:55
  Speaker 4: territory around the.
• 3:56
  Speaker 3: Battle as possible, the relocation.
• 4:00
  Speaker 1: Anyone really moved here through boundless possible No, So there was.
• 4:03
  Speaker 4: A couple of applications, but you know that's sort of
• 4:05
  Speaker 4: fifteen thousand dollars relocation incentive. The money that was spent
• 4:09
  Speaker 4: around that just just kind of didn't hit the mark
• 4:12
  Speaker 4: as what it was expected, because we've really got to
• 4:14
  Speaker 4: look at what's drawing people here.
• 4:16
  Speaker 3: It's got to be the lifestyle.
• 4:18
  Speaker 4: There has to be the job opportunities, and it's really
• 4:20
  Speaker 4: got to be housing affordability and looking at crime and
• 4:24
  Speaker 4: any social behavior as well.
• 4:25
  Speaker 3: So there was a whole big range of things.
• 4:27
  Speaker 4: That we decided to target in our commissioned report and
• 4:30
  Speaker 4: from that, you know, we sort of have now presented
• 4:33
  Speaker 4: a forty page report that we have briefed Government on
• 4:36
  Speaker 4: with a whole range of recommendations and initiatives to be
• 4:39
  Speaker 4: able to improve our population but also to have a
• 4:42
  Speaker 4: sustainable job growth as well through industry.
• 4:45
  Speaker 1: And so has there been much feedback then from the
• 4:47
  Speaker 1: government at this point in time after, you know, after
• 4:51
  Speaker 1: delivering that report.
• 4:52
  Speaker 3: Yeah, So we've had.
• 4:53
  Speaker 4: Some meetings with Investment and team and we've obviously been
• 4:56
  Speaker 4: in the Minister's ear as well around the report and
• 4:59
  Speaker 4: they absolutely support our recommendation. So one of the major
• 5:03
  Speaker 4: things that we did call for in that was resourcing
• 5:05
  Speaker 4: and support for migration and t and for that to
• 5:08
  Speaker 4: have some transparency and accountability to an actual minister so
• 5:12
  Speaker 4: migration and t can then build on that growth of
• 5:15
  Speaker 4: having people wanting to come to the territory, but how
• 5:18
  Speaker 4: we can support them when they do come to the
• 5:20
  Speaker 4: territory or getting them here, and that's also around that
• 5:22
  Speaker 4: chain migration.
• 5:23
  Speaker 1: And so when do you reckon we're going to see
• 5:24
  Speaker 1: some change in that space? You know, when you talk
• 5:26
  Speaker 1: about trying to get people to move here and they're
• 5:29
  Speaker 1: being a minister, you know that's responsible for it.
• 5:33
  Speaker 3: So hopefully there are some things already in the motion.
• 5:35
  Speaker 3: Having a chat to.
• 5:36
  Speaker 4: Some advisors but also some cees, you sort of hear
• 5:39
  Speaker 4: that there are things behind the scenes that are happening,
• 5:41
  Speaker 4: which is really encouraging. But I guess it's getting the
• 5:44
  Speaker 4: message out there that there is work underway. So the
• 5:46
  Speaker 4: public needs to see it. The community needs to see
• 5:49
  Speaker 4: and feel it. So when it sort of starts happening
• 5:51
  Speaker 4: is another guest. But I guess what we need to
• 5:54
  Speaker 4: see is that that the territory is open for business,
• 5:57
  Speaker 4: that you know, we sort of ease off on those
• 5:59
  Speaker 4: restrictions and we can get business here, we can get
• 6:01
  Speaker 4: investment here, and really provide some certainty for territorians that
• 6:05
  Speaker 4: the territory is in a position where we can support
• 6:07
  Speaker 4: ourselves economically.
• 6:08
  Speaker 1: Yea, and hopefully bounce back quickly as well, because I
• 6:11
  Speaker 1: think that you know, through that hardship, if you if
• 6:13
  Speaker 1: you're able to pivot, and if you're able to do
• 6:15
  Speaker 1: that quickly, hopefully it can provide us with opportunities that
• 6:18
  Speaker 1: we might not have had previously. That's right, And I think,
• 6:21
  Speaker 1: you know, there was a time last year where we
• 6:23
  Speaker 1: did have a really huge shot or an opportunity where
• 6:25
  Speaker 1: sort of the rest of the country was closed. But
• 6:28
  Speaker 1: you know, you sort of listen to these reports and
• 6:30
  Speaker 1: the State of the States report that.
• 6:32
  Speaker 4: Is constantly showing us last. They're ranking us last. You've
• 6:36
  Speaker 4: got to put that together with our historical average of
• 6:38
  Speaker 4: vacancies around the office space. It really reiterates the need
• 6:42
  Speaker 4: to speed up those major projects, reduce the red tape,
• 6:46
  Speaker 4: and put greater responsibility on the Tursey.
• 6:48
  Speaker 2: Yeah.
• 6:48
  Speaker 1: Well, I haven't had an update from the from the
• 6:51
  Speaker 1: URSAY at this point in time, so I might see
• 6:53
  Speaker 1: whether I can get one, because I think that it
• 6:55
  Speaker 1: is really important to find out exactly where they where
• 6:58
  Speaker 1: they're at with their would you know, there's been a
• 7:00
  Speaker 1: lot of talk in the early days about the things
• 7:02
  Speaker 1: that they were and weren't going to be doing so
• 7:04
  Speaker 1: I reckon it'd be good to get those more regular
• 7:06
  Speaker 1: updates from them.
• 7:07
  Speaker 4: Absolutely, And another thing that we need to be really
• 7:09
  Speaker 4: supportive of and pushes our education space.
• 7:12
  Speaker 3: So we need to keep the city deals in motion.
• 7:14
  Speaker 4: We need to keep that booming because having the students
• 7:16
  Speaker 4: around the city is going to be one of the
• 7:18
  Speaker 4: major activation pinpoints to be able to fill those empty
• 7:23
  Speaker 4: office spaces, whether it be by student accommodation, retail or
• 7:26
  Speaker 4: extra commercial activity because we will have thousands of students
• 7:31
  Speaker 4: in the CBD and that is one thing that really
• 7:33
  Speaker 4: needs to be taken into account when you sort of
• 7:35
  Speaker 4: look at Newcastle and Tasmania for example, this year Tasmania's
• 7:39
  Speaker 4: office market is at two point seven percent vacant, so
• 7:43
  Speaker 4: compare that with ours May and seventeen point six. It's
• 7:46
  Speaker 4: a real contrast with them having now their university in
• 7:49
  Speaker 4: the heart of the city.
• 7:50
  Speaker 2: Yeah, most certainly is, isn't it. Jeez?
• 7:52
  Speaker 1: You know, you think that you're going well when there's
• 7:54
  Speaker 1: a bit of an improvement for the northern territory, but
• 7:56
  Speaker 1: then when you hear that, you.
• 7:57
  Speaker 4: Think, well, that's got a way to go, that's right,
• 8:00
  Speaker 4: and you know, again, we are still last, and we
• 8:02
  Speaker 4: have historically been last, and we need to take away
• 8:05
  Speaker 4: the positives from it, as you say.
• 8:07
  Speaker 3: But from that it is just the demand in that
• 8:09
  Speaker 3: quality space.
• 8:10
  Speaker 4: So what we feel is that the vacant derelic site
• 8:13
  Speaker 4: tax hasn't been effective in fixing that C grade space.
• 8:16
  Speaker 1: Oh you can tell that like when you go around
• 8:18
  Speaker 1: the city, you go, hang on a second, you know,
• 8:20
  Speaker 1: like some of the you know, the improvements I suppose this,
• 8:24
  Speaker 1: you know that people have been sort of forced to
• 8:26
  Speaker 1: put in you go, it hasn't made it made a
• 8:28
  Speaker 1: big difference.
• 8:29
  Speaker 4: This s band aid solution. Yeah, it's not fixing the
• 8:31
  Speaker 4: real economic problems that we have. It's not revitalizing the sea.
• 8:34
  Speaker 4: But he boarded up windows do not classify as revitalization, right.
• 8:39
  Speaker 4: But that's that's what's happening, and that's what's going on.
• 8:41
  Speaker 4: So you've got to dig deeper into why those problems
• 8:44
  Speaker 4: are occurring. We need the government to be able to
• 8:46
  Speaker 4: work with the property owners as to how we can
• 8:48
  Speaker 4: actually activate these buildings that are going to create some
• 8:52
  Speaker 4: real you know, real security around what's happening in Darwin.
• 8:57
  Speaker 4: So getting people into those spaces other than just putting
• 9:01
  Speaker 4: a sticker on a window.
• 9:02
  Speaker 2: Well, Ruth Palmer, we are going to have to leave
• 9:04
  Speaker 2: it there.
• 9:05
  Speaker 1: The Northern Territory, Executive Director of the Property Council of Australia.
• 9:08
  Speaker 2: Here in the Territory