Government Office Vacancy Rates

About this Item
SpeakersSamios The Hon James; Webster The Hon Robert
BusinessQuestions Without Notice


The Hon. J. M. SAMIOS: My question is directed to the Minister for Planning, and Minister for Housing. With the continuing decline in the economy and
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large areas of central business district floor space remaining unoccupied at considerable cost to building owners, what is the Government doing to minimise its own office vacancy rates?

The Hon. R. J. WEBSTER: The question has major financial implications for the Government. After wages, the Government's greatest cost is accommodation. Total office space held by the Government is around one million square metres, held by numerous agencies. The Property Services Group is the Government's estate manager. It directly controls about 300,000 square metres, or about one-third of the Government's portfolio. In the general commercial office market vacancy rates are running at about 20 per cent, which translates into one in five buildings being empty. I am pleased to advise the House that the Government has kept its vacancy rates well below this figure. In fact, in the buildings managed by the Property Services Group the vacancy rate is about 7 per cent. Our aim is to further improve occupancy rates by providing incentives to government agencies to move into government owned and leased accommodation. Incentives to encourage this are currently being looked at. If we ask agencies to stay within government owned or leased space, rates must be competitive with those in the private sector.

The Government is committed to strategic management of its office accommodation portfolio over the long term. To enable the Government to better understand the way in which it utilises its own buildings and the mix it needs for the future a study is under way which will determine the state of the commercial property market, the impact of government downsizing and the amount of vacant or underutilised space. This will be translated into a strategic management plan for government owned office space. With the development of a centralised strategic plan the Government will be in a far better position to keep its office space needs to a minimum, thereby ensuring vacancy rates are kept below the market average and ensuring the maximum use of government space. It will also mean that a plan will be in place to allow for disposal of accommodation that is no longer required and the acquisition of space which will be suitable for the Government's future needs. The taxpayers of New South Wales are already benefiting from co-ordination of office space needs being undertaken by the PSG but they will benefit also from the strategic plan through major cost savings in the future.