The Cappuccino Co-Efficient: Revisiting Amenity in Suburban Perth Office Markets

Pandemic influenced changes to working patterns has spurred increased amenity across Perth

More suburban office workers, and increased working from home, has spurred a significant increase in retail amenity across suburban Perth according to new analysis by independent West Australian commercial property information and research firm, Y Research.

The analysis undertaken using Y Research’s August 2024 West Australian Suburban Office Market Report, rated the amount of office space in each of the 43 suburban office markets with more than 10,000 sq m across metropolitan Perth against the number of food and beverage options available for office workers. This analysis determined each suburb’s “Cappuccino Co-Efficient” – a measure developed by Y Research to rate each suburb’s amenity. This analysis was first undertaken in 2017; 2024 is the first update of the original measure.

Back in 2017 across suburban Perth, there was on average 1,469 sq m of office space and 79 suburban office workers for each food and beverage option (ranging from cafes, restaurants, takeaway food and pubs). The growth of suburban office markets which have added over 20,000 workers since 2017, combined with pandemic changes such as working from home and working near home, have seen the amount of office space (778 sq m) and office workers (47) drop dramatically in 2024.

Suburbs with major shopping centres, such as Morley and Innaloo, as well as retail strips, like Mt Hawthorn and Mt Lawley, rated the highest in terms of amenity. Across the 10 suburbs with the highest amenity, there was a food or beverage option for every 18 office workers. Conversely, across the 10 suburbs with the low level of retail amenity such as Herdsman, East Perth, Burswood, West Leederville and Rivervale, there are 219 office workers for every food and beverage option.

In the 7 major office markets, including the Perth CBD and West Perth, there are an average of 299.8 office workers per food and beverage options. Markets with strong day and nighttime economy links, Fremantle, Northbridge and Subiaco, all offer significantly more amenity than the Perth CBD and West Perth.

Commenting on the analysis, Director and Chief Problem Solver of Y Research, Damian Stone said, “Perth’s office markets continue to evolve since the pandemic. In 2024, over 46% of metropolitan office supply is now located outside the Perth CBD and West Perth. The scale of the suburban office workforce, combined with working from home and working near home trends that have emerged over the past 5 years, has spurred significant retail amenity across Perth’s suburbs.

Arguably, it has never been easier to grab a coffee across Perth’s suburbs. 7 years ago, 78 office workers were in front of you in the line at the suburban café. Now that’s down to 46. There is a range in the accessibility of retail options across suburban Perth. As outlined, in Herdsman there are 1,112 office workers per venue, compared to 14 in Morley, the best performing suburban office location.

Across the 43 suburbs, the growth of food and beverage options, up nearly 25% in 7 years, demonstrates the increased appetite for amenity in the immediate surrounds of office hubs for their daily coffee or sandwich. The increase in food and beverage venues in suburban markets has been fuelled by more people being in the suburbs on a daily basis (either suburban or CBD based workers, working from home). The scale of food and beverage options in the suburbs, in 2024, means that they are reliant on more than office workers to sustain trade. No café would likely be able to survive on 43 customers per day. The nighttime economy has been a boon for areas such as Northbridge, Fremantle, Subiaco and Victoria Park.

Seven years on from the Cappuccino Coefficient arguing that there was a lack of retail amenity in the suburbs compared to the Perth CBD, the 2024 results reveal that 42 of the 43 suburban office markets offer higher retail amenity than the Perth CBD and West Perth. The next challenge for suburban office markets is a lack of high quality stock. There is already less than 25,000 sq m of A Grade space in the suburbs and, with current construction costs, new supply is unlikely to be added in the short term. The availability of high quality, centrally located stock in the Perth CBD and West Perth will likely impact the suburban office market more than return to office mandates,” said Mr Stone.