1 00:00:00,120 --> 00:00:05,240 Speaker 1: Darwin CBD office vacancy has increased to fourteen point seven percent. 2 00:00:05,640 --> 00:00:08,240 Speaker 1: That's up from eleven point nine percent over the year 3 00:00:08,280 --> 00:00:12,040 Speaker 1: to January, and that's driven largely by negative demand. Now 4 00:00:12,160 --> 00:00:14,480 Speaker 1: joining us on the line is the Property Council of 5 00:00:14,480 --> 00:00:19,800 Speaker 1: Australia's Northern Territory Executive Director Ruth Palmer. Good morning to you, Ruth. 6 00:00:20,360 --> 00:00:21,480 Speaker 2: Good morning Katie. 7 00:00:21,720 --> 00:00:24,079 Speaker 1: Great to have you on the show. Now, Ruthie, what 8 00:00:24,280 --> 00:00:28,880 Speaker 1: exactly does this mean? I mean office vacancy increasing to 9 00:00:29,000 --> 00:00:30,560 Speaker 1: fourteen point seven percent? 10 00:00:31,440 --> 00:00:36,040 Speaker 2: Why, yeah, So Darwin market is pretty small when it 11 00:00:36,080 --> 00:00:38,920 Speaker 2: comes to the CBD. So what we see we put 12 00:00:38,920 --> 00:00:40,720 Speaker 2: this out report out every year. I mean we've just 13 00:00:40,800 --> 00:00:44,519 Speaker 2: sitted around twenty two percent vacant back in sort of 14 00:00:44,520 --> 00:00:49,080 Speaker 2: twenty seventeen twenty nineteen, so we have come down significantly. 15 00:00:49,560 --> 00:00:53,880 Speaker 2: But sometimes because our market is so small, one occupier 16 00:00:53,920 --> 00:00:57,640 Speaker 2: of a building leaving the CBD makes a massive impact. 17 00:00:57,760 --> 00:01:00,560 Speaker 2: And in twenty twenty five we saw that we the 18 00:01:00,600 --> 00:01:05,040 Speaker 2: Northern Land Council relocating out to Berrima into their new premise, 19 00:01:05,400 --> 00:01:10,000 Speaker 2: so that leaves that office bacant, which then increases that 20 00:01:10,240 --> 00:01:13,760 Speaker 2: vacancy rate. So we do see that the numbers shift 21 00:01:13,959 --> 00:01:17,800 Speaker 2: quite significantly because our market is so small. But you know, 22 00:01:17,880 --> 00:01:22,039 Speaker 2: we have had historically high vacancy rates previously, so we 23 00:01:22,160 --> 00:01:26,199 Speaker 2: are seeing that things are still okay, but we're still 24 00:01:26,240 --> 00:01:28,560 Speaker 2: not quite there. So you know, when you look at 25 00:01:28,560 --> 00:01:31,720 Speaker 2: their older stock, we've got like forty two percent vacant 26 00:01:32,000 --> 00:01:34,880 Speaker 2: in our fair grade space. That's nearly half of all 27 00:01:34,920 --> 00:01:37,040 Speaker 2: the older stock in the CBD is vacant. 28 00:01:38,200 --> 00:01:40,360 Speaker 1: Yeah, it's such a good point that you make there 29 00:01:40,440 --> 00:01:43,399 Speaker 1: about you know, if one office or if one building 30 00:01:43,520 --> 00:01:46,880 Speaker 1: ends up being vacated like it has such a huge impact. 31 00:01:47,240 --> 00:01:49,360 Speaker 1: I mean when you talk about the broader impact as 32 00:01:49,400 --> 00:01:52,440 Speaker 1: well on our CBD and the vibrancy of our CBD, 33 00:01:52,880 --> 00:01:54,760 Speaker 1: as you see some of those tenants or as you 34 00:01:54,800 --> 00:01:58,800 Speaker 1: see some of those buildings vacate, it does certainly impact 35 00:01:58,840 --> 00:02:00,920 Speaker 1: more broadly, doesn't Yeah. 36 00:02:00,960 --> 00:02:04,640 Speaker 2: Absolutely, And that's why we pushed really hard a few 37 00:02:04,680 --> 00:02:08,160 Speaker 2: years ago when they were building the Mananda Mananda Place. 38 00:02:08,280 --> 00:02:11,680 Speaker 2: So originally that tender was to be split across Palmerston 39 00:02:11,840 --> 00:02:15,600 Speaker 2: and Darwin, so you'd see the health staff half in Darwin, 40 00:02:15,760 --> 00:02:18,960 Speaker 2: half in Parmesan, and we pushed very hard to ensure 41 00:02:18,960 --> 00:02:22,200 Speaker 2: that we had all those workers still within the CBD. 42 00:02:22,480 --> 00:02:25,600 Speaker 2: And to get that Menanda place up and running. So 43 00:02:25,639 --> 00:02:28,160 Speaker 2: we need to make sure that we're not drawing people 44 00:02:28,280 --> 00:02:31,440 Speaker 2: out of the city and reducing that urban sprawl because 45 00:02:31,440 --> 00:02:33,280 Speaker 2: we want it. We need the city to be the 46 00:02:33,280 --> 00:02:36,000 Speaker 2: engine room, because that is well at the engine room 47 00:02:36,000 --> 00:02:38,480 Speaker 2: of the whole territory, so that has to be pumping 48 00:02:38,919 --> 00:02:40,920 Speaker 2: for everything else to then be able to have that 49 00:02:41,000 --> 00:02:41,720 Speaker 2: flow on effect. 50 00:02:42,200 --> 00:02:44,640 Speaker 1: How do we compare to other states in terms of 51 00:02:44,639 --> 00:02:47,360 Speaker 1: our vacancy rates and you know the way things are 52 00:02:47,360 --> 00:02:48,440 Speaker 1: going in our CBD. 53 00:02:49,560 --> 00:02:53,359 Speaker 2: Yes, So at the moment, if you're looking at the 54 00:02:53,400 --> 00:02:56,359 Speaker 2: capital of the other cities that are of comparable size, 55 00:02:56,400 --> 00:02:59,800 Speaker 2: we sort of look at Canberra and Hobart. Hobart's always 56 00:03:00,240 --> 00:03:02,440 Speaker 2: so they're sitting at around that five point two percent. 57 00:03:02,520 --> 00:03:04,680 Speaker 2: They don't have a lot of space at all to 58 00:03:04,760 --> 00:03:08,720 Speaker 2: work with, and their land sizes of their CBD size 59 00:03:09,080 --> 00:03:11,920 Speaker 2: may be a little bit more restricted as well. Canberra 60 00:03:11,919 --> 00:03:14,560 Speaker 2: sits at ten point two percent, so they're under us. 61 00:03:15,400 --> 00:03:18,360 Speaker 2: But again it's that kind of overall piece around. Well, 62 00:03:18,560 --> 00:03:20,000 Speaker 2: you know what do we do with that B and 63 00:03:20,080 --> 00:03:22,960 Speaker 2: C grade stock because B grades at twenty nine percent 64 00:03:23,040 --> 00:03:25,560 Speaker 2: our A grade, our premium space is only six point 65 00:03:25,600 --> 00:03:28,640 Speaker 2: two percent vacant, So that's very tight. So we do 66 00:03:28,760 --> 00:03:31,120 Speaker 2: need to look at that new stock coming on and 67 00:03:31,160 --> 00:03:34,600 Speaker 2: making sure that we have good quality buildings going forward. 68 00:03:34,880 --> 00:03:37,040 Speaker 2: But it's really that forty two percent in that C 69 00:03:37,200 --> 00:03:41,279 Speaker 2: grade space. But you know, Melbourne is really suffering commercial 70 00:03:41,320 --> 00:03:45,200 Speaker 2: office wise. You know, their vacancy rates have now skyrocketed 71 00:03:45,800 --> 00:03:48,839 Speaker 2: into those nineteen twenty percent and that's largely driven by 72 00:03:49,280 --> 00:03:52,240 Speaker 2: the work from Home mandate and also through COVID what 73 00:03:52,320 --> 00:03:55,040 Speaker 2: they went through. So we didn't take that hit up here, 74 00:03:55,640 --> 00:03:58,160 Speaker 2: and that's a really positive message. But it's it's just 75 00:03:58,200 --> 00:04:01,240 Speaker 2: about what we can do to activate the CBD and 76 00:04:01,280 --> 00:04:04,680 Speaker 2: make a bible but also financially viable for a property 77 00:04:04,720 --> 00:04:06,840 Speaker 2: owner to want to do something with their building. 78 00:04:06,960 --> 00:04:09,520 Speaker 1: Yes, spot on. Hey, I found it really interesting. I've 79 00:04:09,520 --> 00:04:12,280 Speaker 1: had to go to Brisbane, to Melbourne and also to 80 00:04:12,360 --> 00:04:15,080 Speaker 1: Perth in the recent sort of eighteen months, and I've 81 00:04:15,080 --> 00:04:17,680 Speaker 1: found it really interesting going to all three of those 82 00:04:17,760 --> 00:04:21,960 Speaker 1: locations seeing how badly their CBDs have been hit in 83 00:04:22,120 --> 00:04:26,080 Speaker 1: terms of some of the vacancies. Particularly in Perth. You know, 84 00:04:26,200 --> 00:04:28,919 Speaker 1: like their CBD used to be so sort of active 85 00:04:28,960 --> 00:04:32,200 Speaker 1: and vibrant and now you walk around in some of 86 00:04:32,240 --> 00:04:34,760 Speaker 1: those areas and you think, goodness me, it's you know, 87 00:04:34,800 --> 00:04:37,640 Speaker 1: it's very different to what it was several years ago. 88 00:04:38,640 --> 00:04:40,920 Speaker 2: Yeah, that's right, and a lot of that was largely 89 00:04:41,120 --> 00:04:46,279 Speaker 2: due to the COVID shutdowns and obviously people now working 90 00:04:46,480 --> 00:04:48,719 Speaker 2: remotely and working from home and a lot of people 91 00:04:48,800 --> 00:04:51,800 Speaker 2: not going into the offices on Mondays and Friday. So 92 00:04:51,880 --> 00:04:55,040 Speaker 2: what we're seeing now that nighttime economy is Thursday is 93 00:04:55,080 --> 00:04:58,680 Speaker 2: the new Friday. So the bars and pubs, your restaurants 94 00:04:58,720 --> 00:05:01,200 Speaker 2: are more active on a third day, and more events 95 00:05:01,200 --> 00:05:04,000 Speaker 2: and things are being now run on a Thursday because 96 00:05:04,200 --> 00:05:06,599 Speaker 2: otherwise no one's in the city. So I know over 97 00:05:06,640 --> 00:05:10,039 Speaker 2: in the UK they suffered really bad from that nighttime 98 00:05:10,080 --> 00:05:13,760 Speaker 2: economy shutdown and basically no one going to work on 99 00:05:13,800 --> 00:05:17,479 Speaker 2: a Monday or a Friday, and that's also very very 100 00:05:17,520 --> 00:05:20,280 Speaker 2: common in New South Wales and Victorious so with the 101 00:05:20,320 --> 00:05:23,360 Speaker 2: property council, I know in the other states they sort 102 00:05:23,400 --> 00:05:26,640 Speaker 2: of steer away from doing Friday events now and they're 103 00:05:26,640 --> 00:05:29,400 Speaker 2: sort of pushed. The big lunches are now on a 104 00:05:29,440 --> 00:05:32,280 Speaker 2: Thursday because that's when people are in the cities, and 105 00:05:32,320 --> 00:05:34,680 Speaker 2: you know they have a larger commute too, whether it's 106 00:05:34,680 --> 00:05:37,760 Speaker 2: strange or hours away. So yeah, you really got to 107 00:05:37,800 --> 00:05:40,480 Speaker 2: shift the dial around sort of what you do on 108 00:05:40,520 --> 00:05:43,560 Speaker 2: those days, but also what happens to those retailers, the 109 00:05:43,640 --> 00:05:47,240 Speaker 2: hospitality workers when there is no activity on those days. 110 00:05:47,560 --> 00:05:49,800 Speaker 1: It it'd certainly changed the way you do business if 111 00:05:49,800 --> 00:05:52,560 Speaker 1: you had a business in the city. Roase before I 112 00:05:52,640 --> 00:05:55,479 Speaker 1: let you go, I know that the Minister for Tourism 113 00:05:55,480 --> 00:05:58,479 Speaker 1: and Hospitality as well as major events, Murray Clare Boothby 114 00:05:59,080 --> 00:06:02,400 Speaker 1: out talking about this new hotel in our city. Is 115 00:06:02,440 --> 00:06:05,599 Speaker 1: that a hotel that's that has has sort of you know, 116 00:06:06,360 --> 00:06:09,960 Speaker 1: renovated or I can't think of the right word, retro fitted. Yeah, 117 00:06:10,040 --> 00:06:11,320 Speaker 1: repurpose in old building. 118 00:06:12,080 --> 00:06:15,279 Speaker 2: Yeah, absolutely, So that's the old Hell's House that got repurposed, 119 00:06:15,320 --> 00:06:17,479 Speaker 2: which is great to see. So this is the kind 120 00:06:17,520 --> 00:06:20,560 Speaker 2: of innovation that we need. So when we saw the 121 00:06:20,600 --> 00:06:23,760 Speaker 2: first repurpose done, the first commercial to resie that was 122 00:06:23,800 --> 00:06:26,839 Speaker 2: done a hear out at Palmerston above sexy Land, So 123 00:06:26,920 --> 00:06:32,520 Speaker 2: that was transformed into workers Essential Worker Accommodation. They you know, 124 00:06:32,560 --> 00:06:34,480 Speaker 2: that took us quite a long time to get off 125 00:06:34,520 --> 00:06:36,280 Speaker 2: the ground. We ran some site to us out there, 126 00:06:36,360 --> 00:06:38,040 Speaker 2: you know, because there is a lot of things that 127 00:06:38,080 --> 00:06:41,000 Speaker 2: you have to do to change for the permitted change 128 00:06:41,000 --> 00:06:43,480 Speaker 2: of use when you're going from commercial to RESI. So 129 00:06:43,520 --> 00:06:46,400 Speaker 2: it's great to see that this project has gone ahead, 130 00:06:46,640 --> 00:06:49,760 Speaker 2: they've forged through and they have been able to recreate 131 00:06:49,800 --> 00:06:52,279 Speaker 2: that space because you know, that's been empty for a 132 00:06:52,360 --> 00:06:55,480 Speaker 2: very long time. Obviously the tenants out of that building 133 00:06:55,520 --> 00:06:57,880 Speaker 2: went into the new men Under place, so that's that 134 00:06:58,200 --> 00:07:01,320 Speaker 2: empty for yeah, a number of years, like nearly six 135 00:07:01,400 --> 00:07:04,840 Speaker 2: years now, I think. So again, it activates that end 136 00:07:04,880 --> 00:07:08,279 Speaker 2: of Mitchell Street, so you know, you've got the entertainment center, 137 00:07:08,440 --> 00:07:13,000 Speaker 2: you've now got Sweethearts. It's really becoming a vibe down 138 00:07:13,040 --> 00:07:14,920 Speaker 2: that end, and you know it's sort of giving that 139 00:07:15,080 --> 00:07:17,560 Speaker 2: end a bit of purpose because before that kind of 140 00:07:17,600 --> 00:07:20,600 Speaker 2: whole precinct was just a bit dead. So seeing that 141 00:07:20,680 --> 00:07:23,640 Speaker 2: kind of getting activated, you'll you'll then see other things 142 00:07:23,680 --> 00:07:25,960 Speaker 2: spur up from that, and you know, again it's all 143 00:07:26,000 --> 00:07:28,320 Speaker 2: about that any social behavior clean up as well, so 144 00:07:28,680 --> 00:07:32,840 Speaker 2: more people walking around, the safety and cleanliness, lighting, shade events, 145 00:07:33,160 --> 00:07:36,560 Speaker 2: that's always going to help curb that any social behavior. Well. 146 00:07:36,640 --> 00:07:40,880 Speaker 1: Ruth Palmer, Executive Director of the of the Property Council 147 00:07:41,080 --> 00:07:44,680 Speaker 1: here in the Northern Territory, thank you as always for 148 00:07:44,720 --> 00:07:47,600 Speaker 1: your time. Just very quickly before I let you go. 149 00:07:47,760 --> 00:07:49,560 Speaker 1: My producer Kathleen, and I've got a bit of a 150 00:07:49,600 --> 00:07:54,440 Speaker 1: bone to pick with you. You're currently babysitting a baby 151 00:07:54,760 --> 00:07:57,680 Speaker 1: sheep or a lamb. We wanted to bring it in. 152 00:07:57,600 --> 00:08:00,600 Speaker 2: For a visit, I know, And then I did. Cathy. 153 00:08:00,640 --> 00:08:02,320 Speaker 2: I was like, oh, I'm supposed to bring the lamb 154 00:08:02,360 --> 00:08:05,440 Speaker 2: in for Katie. It's like Streuth's hobby farm it it is. 155 00:08:05,680 --> 00:08:06,240 Speaker 2: I'll tell you. 156 00:08:06,240 --> 00:08:09,520 Speaker 1: What's truth and her tips for cyclones and for looking 157 00:08:09,560 --> 00:08:10,840 Speaker 1: after farm animals. 158 00:08:11,480 --> 00:08:14,880 Speaker 2: You don't all right, I've toilet trained the baby lamb. 159 00:08:14,960 --> 00:08:18,000 Speaker 2: Can you believe it? I can. He does what I 160 00:08:18,120 --> 00:08:18,480 Speaker 2: needed to. 161 00:08:18,880 --> 00:08:21,400 Speaker 1: I actually can believe it because anyone who's met you 162 00:08:21,520 --> 00:08:23,720 Speaker 1: knows that you're a little pocket rocket, so of course 163 00:08:24,240 --> 00:08:25,640 Speaker 1: you've trained it. 164 00:08:26,040 --> 00:08:28,280 Speaker 2: Very He couldn't believe it. He's like, oh my god, 165 00:08:28,320 --> 00:08:32,360 Speaker 2: you've actually trained this land. That is gold. 166 00:08:32,520 --> 00:08:36,200 Speaker 1: How Northern Territory of you. Ruth Palmer lovely to catch 167 00:08:36,280 --> 00:08:40,200 Speaker 1: up you are. Thank you. We'll talk to you again soon. 168 00:08:41,320 --> 00:08:42,440 Speaker 2: Katie. Thank you.