Investment Rating - The report indicates a positive outlook for Perth's CBD office market, supported by a virtually non-existent supply pipeline and expected stronger rental growth due to falling vacancy rates [3][28]. Core Insights - Perth's CBD office market experienced a slight decline in vacancy rates, down 0.1% to 16.9% over H2-2025, with prime vacancy at 15.6% and secondary vacancy at 19.2% [6][26]. - The annual net absorption was positive at +6,429 sqm in 2025, although this was a 58% decrease from the previous year [8]. - The total stock in Perth's CBD is 1,843,848 sqm, with prime net face rents increasing by 3.5% year-on-year to $734/sqm, while net effective rents fell by 0.4% year-on-year [12][42]. - Prime incentives have risen to 47.0%, impacting net effective rents, which now average $389/sqm [13][42]. - The economic outlook for Western Australia remains positive, with a forecasted outperformance compared to the national average over the next three years [16][20]. Summary by Sections Vacancy and Supply - The total vacancy rate in Perth's CBD remained stable, with a slight decrease of 0.1% to 16.9% [6][26]. - The prime vacancy rate increased to 15.6%, while secondary vacancy tightened to 19.2% [26]. - No new major office developments are expected to complete before 2031, leading to a forecasted decline in vacancy rates over the next five years [28]. Rental Growth - Prime net face rents increased by 3.5% year-on-year, while net effective rents decreased slightly due to rising incentives [12][42]. - Secondary net face rents averaged $473/sqm, with incentives at 50%, leading to a marginal decline in net effective rents [42]. Demand and Leasing Activity - Lease inquiries in 2025 were primarily for prime space (37%) and A-Grade-only options (35%), indicating a focus on quality despite cost considerations [43][44]. - The largest requirement in 2025 was from Western Power, seeking approximately 20,000 sqm in the CBD [44]. Investment Market - There were no office transactions in Perth's CBD in 2025, marking a significant downturn in investment activity [64]. - Prime yields remained flat at 7.6%, with secondary yields slightly softening to 8.64% [66].