Unleashing Perth CBD’s Full Potential

PERTH, 13 SEPTEMBER 2023 – JLL, a global leader in real estate sees a brighter future for Perth CBD, through residential and retail activation where people live, work, play, shop and eat.

Perth is currently positioned as the 12^th most liveable city globally which is an incredible achievement, but JLL Research analysis has identified areas for improvement, as the Perth CBD has a much lower residential population and a significantly higher retail and office vacancy rate than the top ranked cities around the world. 

Figure 1: World’s Most Liveable Cities – CBD Office and Retail Vacancy Rates

“Considering Perth ranks highly as one of the most liveable cities in the world, Perth’s CBD office and retail vacancy rates are both significantly higher than cities that appear above Perth in the Economist Intelligence Unit’s Global Liveability Index,” said JLL’s Managing Director WA, Angelo Amara.

JLL’s analysis of unlettable office buildings in the Perth CBD and assessment of unused existing buildings located above existing ground-floor retail amenity in the CBD present an opportunity to create residential dwelling stock, especially relevant at a time whereby housing supply shortage issues continue to prevail.

JLL's Director, Real Estate Economist - Australia, Ronak Bhimjiani said, “Analysing Perth CBD existing office stock has provided an interesting perspective on the potential adaptive reuse of ageing and secondary grade office stock. We have found that approximately 11% (or 205,500 sqm) of all Perth CBD office stock can be observed for adaptive reuse purposes, such as residential activation.

“Approximately 47% of this stock is situated in the East Perth precinct, where a significant proportion of apartment dwelling stock already exists.

“Increased CBD retail and population density activation tends to work best when there is suitable residential stock situated in the core CBD. Even when omitting East Perth, this presents an opportunity to assess approximately 110,000 sqm of Perth CBD office stock situated in more centrally located precincts of the CBD. This could in effect provide an additional 1,570 new apartments housing 2,500 people,” said Mr Bhimjiani.

JLL Research also assessed vacancy rates in the Hay Street Mall, Murray Street Mall, and surrounding areas, identifying that empty, unused spaces in heritage buildings located above existing retail amenity has the potential to become 350 apartments or housing for 600 people.

“The potential undertaking of adaptive reuse of existing office and retail stock into residential dwellings can be expected to add over 3,100 new residents in the CBD, making a significant contribution of approximately $50 million in additional revenue toward the CBD retail sector,” explained Mr Bhimjiani.

To fuel this activation, JLL endorses the Property Council WA report Building a Vibrant Future for Perth that recommends a host of initiatives and recommendations to spur growth such as incentives for residential development and the provision to continue providing heritage grants to those seeking to revitalise the CBD. Other measures identified include tax breaks, subsidies, reduced development fees or expedited permits for work which includes a residential component. In the context of the Malls specifically, attribution of value is intrinsically linked to the ground plane, where retail rents are highest.

“Strata-titling neglected upper floors of assets and encouraging consideration and completion of the base building works to make this viable needs to be given serious thought. Partnering with existing owners on solutions that may allow them to retain their stakes on the ground floor while getting creative with what is up above has not been explored as widely as it could be,” said Mr Amara.

Affordable housing initiatives are also needed to make units accessible to buyers from a range of income levels. The benefits of living in the CBD with proximity to employment, nightlife and other attractions can be enhanced by increasing cultural and entertainment events, leading to an engaging campaign that would promote the Perth CBD as ‘the place’ to live, work and play.

With embracing adaptive reuse practices, transforming dormant spaces into residential areas, and enhancing cultural and entertainment offerings, together we can create a revitalized and thriving Perth CBD.