North Shore office market vacancy rate falls

The vacancy rate across the North Shore’s office market has fallen, according to the Property Council of Australia’s latest Office Market Report.

In the six months to January 2016, the vacancy rate fell from 8.5 per cent to 7.8 per cent across the North Shore - comprising North Sydney, Crows Nest/St Leonards and Chatswood.

"The North Sydney and Crows Nest/St Leonards sub-markets experienced a drop in the vacancy rate," Acting NSW Executive Director Felicity Wilson said today.

“Only the B grade market recorded positive demand – where 1,812sqm of net absorption helped lead to a fall in the vacancy rate from 9.8 per cent to 8.5 per cent.

“Other grades have vacancies lower than 12 months ago – with A grade down from 7.7 per cent to 6.6 per cent, C grade down from 10.6 per cent to 8.9 per cent and D grade down from 12.9 per cent to 7.8 per cent.

“But the main contributor to the overall results across all markets was a withdrawal of 11,722sqm of stock.

“Chatswood saw 5,546sqm of stock withdrawn, net absorption in the negative by 7,647sqm and the end result was an increase in the vacancy rate from 6.8 per cent to 7.7 per cent.”

Ms Wilson said 39,383sqm of new space is in the pipeline for 2016, though substantially more stock is mooted for future years.

 

Media contact:  Felicity Wilson  |  M  0410 509 280  |   E  fwilson@propertycouncil.com.au

 

Analysis – NORTH SHORE MARKET

Headline comments:

  • Vacancy for the overall North Shore market decreased over the period
  • This was due to withdrawals and demand
  • B grade segment recorded positive demand
  • Chatswood was the only North Shore market to record a vacancy increase over the period

 

Vacancy analysis:

  • Total vacancy for the North Shore decreased from 8.5 per cent in July 2015 to 7.8 per cent in January 2016
  • This was due to 11,722sqm of withdrawals and 943sqm of net absorption
  • 1,435sqm of space was added over the period
  • The B grade segment recorded positive demand

 

North Sydney:

  • North Sydney vacancy decreased from 8.0 per cent to 7.1 per cent over the half year to January 2016
  • This was due to 5,021sqm of net absorption and 2,604sqm of withdrawals

 

Crows Nest / St Leonards:

  • Vacancy decreased from 11.2 per cent to 9.6 per cent
  • This was due to 3,596sqm of net absorption and 3,572sqm of withdrawals
  • 1,435sqm of space was added over the period

 

Chatswood:

  • Vacancy in Chatswood increased in the 6 months to January 2016 from 6.8 per cent to 7.7 per cent
  • The increase was due to -7,674sqm of net absorption
  • 5,546sqm of space was withdrawn over the period

 

Future supply:

  • 39,383sqm of space is due to enter the North Shore market in 2016
  • No further space in due to come online over the 2 years after that
  • 160,620sqm is mooted

 

Key market indicators, North Shore (aggregate)

 

Key market indicators, North Shore (by locale)

 

Future supply, North Shore (by locale)