Building grade matters. Asset strategy matters more.

As Perth’s office market strengthens, the widening gap between prime and secondary assets is putting a sharper focus on how existing buildings are positioned, operated and invested in.

The Perth CBD office market continues to strengthen, but the latest data suggests the benefits are not being shared equally.

Cushman & Wakefield’s Q3 2026 reporting shows demand improved across most office grades, with A Grade recording the strongest uplift. Premium net effective rents increased 7.2% year-on-year to $465/sqm, while A Grade rents increased 1.5% to $353/sqm. By contrast, B Grade rents declined 3.5% despite improving demand.

The broader market fundamentals are encouraging. Overall Perth CBD vacancy has tightened to 15.4%, while limited availability of well-located Premium space is directing more occupiers towards good-quality A Grade alternatives.

For owners of secondary assets, however, the numbers raise an important question.

When the market is improving but your part of the market isn’t improving at the same rate, what can you do about it?
It’s not simply about building age

There is an obvious temptation to view the divide between prime and secondary buildings as a function of age or grade.
We think the more useful conversation is about the underlying asset.

Older buildings are not necessarily poor buildings. Equally, a property’s current grade doesn’t guarantee its future competitiveness.
What matters is whether the asset is meeting the expectations of its target market, and whether the owner has a clear understanding of where investment will genuinely influence performance.

That requires looking beyond the foyer.
Building services, reliability, amenity, energy performance, common areas, end-of-trip facilities, presentation, maintenance standards and the day-to-day experience of tenants all contribute to how a building performs.

Repositioning doesn’t necessarily mean rebuilding

Nor does repositioning automatically require a major refurbishment.

The better starting point is understanding the gap between For secondary asset owners, competing with Premium stock dollar-for-dollar is rarely the answer.
where the asset is today and where it needs to be for the market it is targeting.

That might identify a major investment requirement. But it can just as easily uncover a series of more targeted interventions.
A poorly performing mechanical system may matter more than a cosmetic upgrade. Improving the arrival experience may have greater impact than replacing finishes throughout the building. Bringing forward a planned lifecycle replacement may create an opportunity to improve efficiency and reliability at the same time.

At Helm, we see the asset strategy as the mechanism that connects these decisions.
It allows owners to consider leasing objectives, capital expenditure, lifecycle requirements, operations and tenant experience together, rather than treating each as a separate workstream.

Avoiding the capex trap
There is also a danger in assuming that repositioning an asset simply means spending more money.

More capex does not automatically create a better asset.

The objective should be to identify the expenditure that protects or enhances performance, understand when it should occur, and align it with the owner’s broader strategy for the property.
That becomes particularly important for existing buildings carrying deferred maintenance or approaching major plant and equipment replacement.
Done well, planned lifecycle expenditure can become part of the repositioning strategy rather than simply another cost of ownership.

The opportunity in the middle

Cushman & Wakefield reports that limited availability of well-located Premium space is already directing more occupiers towards good-quality A Grade options. Meanwhile, CBRE’s Q2 figures put secondary vacancy at 18.4%, compared with prime vacancy of 13.7%.

The current Perth market may actually create an interesting opportunity for well-positioned existing assets. The distinction between those markets is significant.
But for owners, the more valuable question may be:

What would it take to move our asset towards the better-performing end of its own market?

That is a different question from asking how to turn a secondary building into a Premium one. And in many cases, it is a much more commercially useful question.

“Owners don’t necessarily need to chase Premium Grade to improve an asset’s performance. The opportunity is to understand what the building’s target market actually values, identify what’s holding the asset back and then direct capital towards the areas that will make a meaningful difference.”

Matthew Holmes, CEO, Helm Asset Advisory

As competition for quality accommodation continues, there will inevitably be buildings that outperform their grade and others that underperform it.

For owners, that’s why asset strategy matters.

The goal isn’t to have the newest building. It’s to make the existing building as relevant, reliable and competitive as it can be.

[assets.cus…efield.com] [cbre.com.au]