The contraction that hit the CBD and West Perth markets late in 2012 when commodity prices fell is contributing to significant vacancies in Perth's suburban office market, where construction is still under way on the next wave office buildings.
The weaker leasing market and a record supply of new office space in Perth's suburbs, has driven up the suburban office vacancy rate to 14.6 per cent.
The new space was delivered in 15 buildings and with construction scheduled to finish at 12 new projects in June, vacancies are forecast to remain high this year.
According to the March 2014 WA Suburban Office Report, a survey compiled by research firm Y Research, the eastern office market has been hardest hit hard by the mining downturn.
"Among the best performing suburbs are Leederville, East Perth, Herdsman and Perth Airport," said Y Research principal Damian Stone.
"Outside Perth Airport though, most markets in the eastern suburbs are experiencing vacancy rates above 20 per cent."
Rivervale's market, where there are development approvals for two office developments in the Springs Rivervale infill project and one nearby on Great Eastern Highway, recorded the highest office vacancy rate of 48 per cent while it climbed to 28 per cent in Belmont and Ascot.
In the south, Armadale recorded a vacancy of 24.3 per cent and in Joondalup, it was 24.5 per cent.
Vacancies in the best performing markets ranged from zero at Cockburn Central and Murdoch to 6.4 per cent at Herdsman.
Mr Stone said downsizing in the resources and corporate sector and backfill vacancy created by new developments was offsetting demand for new developments.
"In the past six months, Leighton, as part of its move to WorkZone, vacated 4000sqm across properties in Nedlands, Ascot and Northbridge and Newmont Mining made 2376sqm available to the sublease market at the Colonnade in Subiaco," he said.
"Further vacancy is expected in the next reporting period due to the liquidation of Forge Group, which occupied 5000sqm across three suburban properties."
Outside the resources sector, Telstra created the biggest vacancy - 2543sqm at 80 Stirling Street in Northbridge.
The State Government also added in more than 2500sqm of vacated space in two moves - the relocation of the Heavy Vehicle Operations Centre from 70 Pilbara Street, Welshpool and the Department of Child Protection moving out of 281 Great Eastern Highway in Midland.
With 70,881sqm of new space added since September, Y Research says that for the first time, the suburban office market is bigger than the CBD market. Across Perth's suburbs there is now 1,607,313sqm of lettable space which is 0.7 per cent more than in the Perth CBD.
Mr Stone said strong leasing agreements were in place for the 12 new office buildings to be completed by June including BCG's project at 20 Walters Drive in Herdsman and Georgiou Group's 2 Tassels Place, Innaloo.
"Nearly 20,000sqm of heavily pre-committed office stock has also started this year, showing that there are companies that are still growing," he said.
"With the new supply for the next 18 months and existing vacancies, we expect the suburban vacancy rate to remain high and whilevacancy rates are high it's broadly in line with other national non-CBD markets."