RESHAPING THE CITY: PERTH
CITY 20 25 UNLOCKING VALUE IN A MARKET AT A CROSSROADS RESHAPING THE
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RESHAPING THE CITY: PERTH
CONTENTS 01 INTRODUCTION 02 CORE STRENGTH: WHERE VACANCY FLOWS
03 BEYOND THE GRADE: THE QUALITY DIVIDE 05 RESILIENCE AT THE CORE: REINVENTION AT THE EDGE
04 MINING FLEXIBILITY:
THE PARADOX OF MANDATES
06 CONCLUSION
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INTRO 01
RESHAPING THE CITY: PERTH
Clustering defines the tenant base, with mining, government, financial institutions, and professional services each reinforcing distinct footprints in the city.
KEY TAKEAWAYS
Centralisation remains powerful, with demand pulling toward the Statistical Division 3 area. Flight to quality continues, as tenants gravitate toward higher-floor, better-equipped buildings that deliver on amenity and value. Clustering defines the tenant base, with mining, government, financial institutions, and professional services each reinforcing distinct footprints in the city. Perth’s market is smaller and more balanced in its distribution of core and non-core stock, but the fundamentals are clear: the best-located and best-designed space still outperforms. Even as many major occupiers adopt flexible Return to Office (RTO) policies, their CBD presence remains sticky. The CBD’s top 50 tenants by occupied area account for one-third of total space and over half of prime stock, underscoring the enduring role of the CBD in housing Perth’s most critical industries. As the market recalibrates, the question is less whether Perth’s CBD will reshape, but more on how its core, quality assets and sector clusters will define the city’s next chapter.
DYNAMICS SHAPING DEMAND | CENTRALISATION | FLIGHT TO QUALITY SECTOR CLUSTERING PERTH’S OFFICE RESET
DUCTION
STATISTICAL DIVISION 3 | LOWER VACANCY | STRONGER ABSORPTION ELEVATION RESILIENCE CORE ADVANTAGE
BUILDING QUALITY INDEX TIERS WEAKER A-GRADE AT RISK QUALITY DIVIDE
Perth’s CBD is entering a new phase of evolution. Shaped by the same forces transforming office markets across Australia – centralisation, flight to quality, densification – its dynamics are playing out on a more concentrated stage.
HIGH ATTENDANCE, SOFT MANDATES
CBD BUSY TODAY | FUTURE DEMAND FLUID | FIRMS TRIAL NEW MODELS
275,000 SQM OF PRIME CBD SPACE BY 2026–28 60% ON LOWER FLOORS STRESS TEST FOR CORE VS FRINGE LEASE EXPIRY TEST
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RESHAPING THE CITY: PERTH
Two clear spatial preferences are shaping Perth’s CBD: a pull toward the core and a preference for higher floors.
St Georges Terrace remains the CBD’s traditional spine and a key location for much of the prime-grade stock, particularly along and south of the street. But performance is defined not by address alone – the strongest outcomes are concentrated within the Statistical Division 3 area, as defined by the Property Council of Australia, centred north of Elizabeth Quay and bounded by St Georges Terrace, Mounts Bay Road, Mill Street and The Esplanade. This concentration illustrates the core’s advantage. Despite accounting for just over half of total CBD stock (52%), its vacancy share sits lower at 47%. Since 2020, it has absorbed around 118,000 sqm of demand, while non-core areas collectively lost about 47,000 sqm of demand. The contrast is sharper in prime stock: the core holds 56% of space but only 29% of vacancy, alongside roughly 71,000 sqm of net absorption, compared with a -18,000 sqm outcome for non-core prime assets.
Between early 2024 and 2025, Perth’s vacancy map has started to be redrawn, marking a new phase of market polarisation. The city’s core remains resilient, while rising vacancies north of St Georges Terrace reaffirm its long-standing role as the city’s natural fault line. Beyond the terrace, emerging clusters of empty space point to the early signs of structural vacancy – particularly across fringe precincts where tenant demand has thinned. This shift is most visible in the prime market, where performance increasingly hinges on proximity and positioning. Vacancy is drifting outward
02 CORE STRENGTH: WHERE VACANCY FLOWS
from the core, extending west into Statistical Division 2 and east from
Division 3 into Divisions 1 and 4, with new pockets now appearing in Division 5. The message is clear: centrality is once again the market’s key differentiator. Core assets continue to capture demand and maintain absorption, while non-core precincts shoulder an outsized share of vacancy that will take longer to resolve.
CHART 1
PERTH CBD CORE VS NON-CORE
80%
160,000
60%
120,000
40%
80,000
20%
40,000
0%
0
-20%
-40,000
-40%
-80,000
-60%
-120,000
-80%
-160,000
Total
Prime
Total
Prime
Core
Non Core
Share of Stock
Share of Vacancy
Net Absorption since 2020 (RHS)
Source: PCA, Cushman & Wakefield Research
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RESHAPING THE CITY: PERTH
Vacancy is drifting outward from the core, extending west into Statistical Division 2 and east from Division 3 into Divisions 1 and 4, with new pockets now appearing in Division 5.
CHART 2
PRIME OFFICE VACANCY IN JULY 2024 (SQM)
Source: PCA, Cushman & Wakefield Research
The core holds 56% of space but only 29% of vacancy, alongside roughly 71,000 sqm of net absorption, compared with a -18,000 sqm outcome for non-core prime assets.
CHART 3
PRIME OFFICE VACANCY IN JULY 2025 (SQM)
Source: PCA, Cushman & Wakefield Research
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RESHAPING THE CITY: PERTH
CHART 4
PRIME NET FACE RENTAL PREMIUM: HIGH FLOORS VS LOW FLOORS
22%
20%
18%
16%
14%
12%
10%
8%
6%
2022
2023
2024
2025
Source: Cushman & Wakefield Research
03 BEYOND THE GRADE: THE QUALITY DIVIDE
Elevation adds another layer of resilience. High-rise floors show materially lower vacancy and command stronger rent premiums than mid- and low-rise levels. In the core, high floors record just 3% vacancy compared with 6% on lower floors, while in non-core precincts the split is 4% versus 8%. Rental differentials are also widening – premium grade offices show a 20% rent premium for high floors, while A-grade assets record a still
significant 14% premium. This mirrors Sydney and Melbourne, reinforcing that even in Perth’s smaller, more evenly split market, tenants remain highly selective with strong preference for higher floors. Centrality and elevation work together to define the most resilient segment, while non-core assets face structural challenges that will require clear repositioning strategies.
CHART 5
PRIME VACANCY BREAKDOWNS
500,000
6%
400,000
8%
3%
300,000
200,000
4%
100,000
-
Other floors
High floor
Other floors
High floor
Core
Non-Core
Occupied
Vacant
Source: Cushman & Wakefield Research
Tenants prefer the core and higher floors, reinforcing the premium attached to centrality and elevation – with core market absorbing demand and high-rise space commanding lower vacancy and rising rent premiums. KEY TAKEAWAY
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RESHAPING THE CITY: PERTH
CHART 6
BUILDING QUALITY INDEX – PRIME OFFICE
1.00
0.80
0.60
Demand for high-quality office environments has become a defining feature of Perth’s CBD. While traditional grades provide a shorthand for quality, the Building Quality Index (BQI) shows that performance varies widely within each grade.
0.40
0.20
Cushman & Wakefield’s BQI benchmarks assets against the four “S” pillars: Site, Situation, Sustainability, and Services. Applied to Perth, the results reveal distinct quality tiers within the prime segment. The first tier, mostly Premium, cluster tightly at the upper end of the scale and consistently record lower vacancy. From there, the index steps down sharply into a second tranche of assets with noticeably weaker quality scores, followed by a series of further drops that create multiple lower tiers. These breaks highlight that buildings are not spread evenly along the spectrum but instead group into clear bands of competitiveness. Premium buildings overall perform strongly, with only one asset sitting lower on the index due to its fringe location – though even there, performance is broadly in line with its position. By contrast, several A-grade assets fall into the “structural vacancy risk” zone, combining middling quality scores with persistently high vacancy. Without repurposing, repositioning, or major intervention, they risk being left behind despite their prime grade classification. Together, the BQI and vacancy mapping reinforce the same pattern observed across the CBD: location, elevation, and
0.00
A Grade
Premium Grade
SITE Locational features
BQI Range: 0 to 1 (0=lowest quality, 1=highest quality) * Each bar represents an individual prime office building located in the Perth CBD Source: Cushman & Wakefield Research
SUSTAINABILITY Environmental Perfofmance
BUILDING INDEX
CHART 7
SITUATION Building fundamentals
BUILDING QUALITY INDEX RATING AND VACANCY RATE, PRIME OFFICE
100%
SERVICES Tenant appeal
80%
Structural Vacancy Risk
60%
quality work together to define resilience. Prime assets in the core, particularly on higher floors, combine strong fundamentals with quality credentials and continue to capture the bulk of demand. By contrast, weaker prime assets without differentiation risk slipping into structural vacancy. The implication is clear: in Perth’s smaller market, where demand is concentrated and competition is intense, being central, elevated, and high-quality is no longer optional – it is the baseline for relevance.
Falling Vacancy Risk (Upside risk)
40%
20%
0%
Rising Vacancy Risk
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
BQI Range: 0 to 1 (0=lowest quality, 1=highest quality) Size of Bubble = NLA
A Grade
Premium Grade
Source: Cushman & Wakefield Research
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RESHAPING THE CITY: PERTH
Perth’s CBD (as defined by the PCA) prime office market is shaped by a highly concentrated tenant base. Four sectors dominate: professional services (330,000 sqm), mining – including oil and gas (329,000 sqm), government – both state and federal (195,000 sqm), and financial institutions (145,000 sqm). Together they account for close to one million square metres, which is the bulk of CBD demand.
Within the top 50 tenants by occupied area, who occupy more than 650,000 sqm (over half of prime stock), mining emerges as the clear leader at 269,000 sqm, followed by government at 173,000 sqm. Professional services and finance are significant in aggregate but play a smaller role at the very top end. Unlike Sydney and Melbourne, where banks define CBD demand, Perth’s gravitational centre is mining, with professional services clustering around it, while government is more dispersed and influential outside the core. Return-to-office policies further distinguish Perth. Among the top 50 tenants, 95% have soft or no mandates, concentrated in mining, energy and government, banks stand out as the only major group with strict enforcement.
One reason is Perth’s consistently high physical occupancy, among the highest of any Australian CBD, which reduces the need for hard mandates. Mining firms go further, trialling compressed weeks and nine-day fortnights for corporate staff. These policies have not yet cut space requirements, but they highlight a paradox: the largest occupiers anchoring the CBD are also the most flexible. Government adds weight to this softer profile. With nearly 200,000 sqm of prime space, it is Perth’s second-largest prime office occupier, but its footprint lies mostly outside the core. This contrasts with mining, which dominates the core and shapes surrounding demand. Financial institutions, while smaller in total space, concentrate in a handful of towers.
04 MINING FLEXIBILITY: THE PARADOX OF MANDATES
CHART 8
PRIME OFFICE OCCUPANCY BY INDUSTRY
2%
3%
10%
Professional Services
4%
27%
Mining
Public Sector
Financial and Insurance
12%
Real Estate
Power and Water Services
Construction
16%
27%
Others
Source: Cushman & Wakefield Research
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RESHAPING THE CITY: PERTH
Ultimately, the outlook hinges on decisions made by these largest occupiers. If they expand or bring more people back, demand will concentrate in the core, widening the gap with fringe areas. If flexible models deepen, structural vacancy risks will intensify. In Perth’s smaller market, where demand is concentrated in a few hands, the strategies of the top 50 tenants will define not only how much space is used, but where CBD demand consolidates.
Mining dominates the core and shapes surrounding demand.
CHART 9
TOP 50 TENANTS RTO MANDATES BY INDUSTRY
Mining
Public Sector
Professional Services
Financial and Insurance
Power and Water Services
Construction
Real Estate
Info Media and Telco
Healthcare
Retail Trade
-
50,000 100,000 150,000 200,000 250,000 300,000
Soft/No Mandate
Hard Mandate/Full RTO
Source: Cushman & Wakefield Research
CHART 10
SPATIAL DISTRIBUTION OF KEY SECTORS*
Source: Cushman & Wakefield Research *Clusters represent one standard deviation around the geographic mean of each sector
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RESHAPING THE CITY: PERTH
The trends shaping Perth’s CBD carry clear implications. Vacancy and absorption patterns confirm the resilience of the core, while clustering and RTO dynamics highlight ongoing challenges in the fringe.
The decisive factor will be lease expiries: between 2026 and 2028, more than 275,000 sqm of prime space is set to roll, including 193,000 sqm in the core and 76,000 sqm in Divisions 1 and 2. Around 60% of this space sits on lower floors – already the softest part of the market – while higher-floor expiries are concentrated in Divisions 2 and 3, with about 25,000 sqm and 83,000 sqm respectively. This cycle will be the stress test for Perth, determining whether demand consolidates further in the core or whether fringe precincts can reposition. The tightening supply in the core is also gradually reshaping leasing conditions. Rents are trending upward while incentives remain elevated but broadly stable, with many landlords becoming more prescriptive about how these are structured. Lease negotiations have also evolved, with owners pushing back on previously tenant-friendly terms, particularly around annual escalations, option periods and make-good clauses. The shift reflects a market gaining confidence as competition for quality space intensifies. For tenants, expiries create leverage. Softer vacancy outside the core may appeal on cost, but the real opportunity
lies in upgrading – trading lower floors for higher-quality or high-rise space, particularly in the core. Acting early will matter, as the most resilient buildings are likely to be contested. For landlords, expiries sharpen the need to invest. St Georges Terrace remains important, but sustainability, services, and amenity are now equally critical. Divisions 1 and 2 are most exposed: without repositioning, tenants may consolidate into the core as leases roll. For investors, expiries highlight both risk and upside. Core, high-quality assets are positioned to capture flight-to-quality demand, while fringe and lower-floor stock face rising structural vacancy. For policymakers, the expiry profile presents an opportunity to further activate the fringe. Divisions 1 and 2 already contain several high-performing prime assets with solid tenant demand, providing a strong foundation for broader renewal. Strengthening amenity, transport and mixed-use offerings can help spread demand more evenly across these precincts and ease reliance on a limited number of standout assets.
05 RESILIENCE AT THE CORE: REINVENTION AT THE EDGE
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RESHAPING THE CITY: PERTH
CHART 11
PRIME OFFICE OCCUPANCY BY INDUSTRY
Source: Cushman & Wakefield Research
The tightening supply in the core is also gradually reshaping leasing conditions. Rents are trending upward while incentives remain elevated but broadly stable.
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CON 06
RESHAPING THE CITY: PERTH
CLUSION
Perth’s office market stands at a turning point. The fundamentals of centrality and quality continue to dictate performance, yet the city’s trajectory will be defined by how its largest occupiers, landlords, investors, and policymakers respond to shifting patterns of work and demand. Mining and government will remain the bedrock of Perth’s CBD, but their softer approach to RTO, coupled with mining’s push into more innovative workplace models, signals that future space needs may not be fixed, even for the city’s largest occupiers. Instead, the next chapter lies in harnessing the CBD’s strengths – core resilience, high-rise quality, and sector clustering – while actively repositioning non-core areas most exposed to vacancy and upcoming lease expiry. The challenge is also the opportunity: Perth can evolve from a market of contrasts into one of balance. Reinforcing the gravitational strength of the core while breathing new life into the fringe will determine whether the CBD grows more concentrated, or more diverse. Success will depend less on whether demand exists, and more on how it is channelled – shaping not only the next leasing cycle, but the city’s urban identity for the decade ahead.
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Contacts
Sean Ellison Associate Director, Economics and Forecasting sean.ellison@cushwake.com
Lin Lee Senior Strategic Research Analyst lin.lee@cushwake.com
Dr. Dominic Brown Head of International Research, Global Think Tank dominic.brown@cushwake.com
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2024, the firm reported revenue of $9.4 billion across its core service lines of Services, Leasing, Capital Markets, and Valuation and other. Built around the belief that Better Never settles, the firm receives numerous industry and business accolades for its award-winning culture. For additional information, visit www.cushmanwakefield.com.au
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