Despite the COVID-19 pandemic and the resulting Australian Government closure of the international border from 20 March 2020, The Australian Bureau of Statistics estimated that Tasmania’s population increased by 0.16 per cent in the June quarter 2020 or from 30 June 2020, 1.12 per cent higher than the level at 30 June 2019.

This result was the fifth-highest growth rate of all jurisdictions for the period. National population growth of 1.27 per cent was recorded through the year to 30 June 2020.

We expect to see a moderate uplift in these figures for the next 12 months based on feedback we receive from interstate enquiries. General enquiries for business purchasers are often from ex-pats planning to return to their home state of Tasmania looking to continue working either in an existing business or a start-up business.

“According to the latest Property Council of Australia’s Office Market Report, Hobart continues to perform well with office vacancies at just 5.1 per cent.”

The main change we have seen in the past twelve months has been a marked improvement in business confidence resulting in an increase in the level of business investment in commercial real estate. As a result, we are seeing an increase in enquiries for smaller offices in Hobart and Launceston.

According to the latest Property Council of Australia’s Office Market Report, Hobart continues to perform well with office vacancies at just 5.1 per cent. We expect to see this figure reduce in coming years as we are not expecting significant new development of office buildings, nor are we seeing a reduction in demand for Hobart CBD office space or an increase in sublease space coming to the market as a result of COVID-19.

The longer-term implications of a reducing office space supply may include:

• the potential for Hobart CBD rental increases in 2022/23.
• refurbishment of B grade office buildings in response to increased demand and higher rentals; and 
• increased demand for non-CBD office space, particularly if parking is available with the office space.

We have seen Hobart CBD office workers return to their workplaces which is good for CBD retail and food services outlets. Based on a January 2021 PCA survey, the percentage of returned workers has increased from 76% in December 2020 to 80% in January 2021.