Parramatta’s office market remains tight at the top

Parramatta’s office market has the lowest vacancy rate among the major markets in Sydney, according to the Property Council of Australia’s latest Office Market Report.

The vacancy rate fell in Parramatta from 7.4 per cent to 5.6 per cent in the six months to January 2016.

"Parramatta has retained its status as the office market with the lowest vacancy rate in Sydney," Acting NSW Executive Director Felicity Wilson said today.

“Vacancy rates decreased across A, B and C grade assets in the last six months due to a mix of positive demand and withdrawals.

“But the tale across asset grades varies substantially – with a 1.7 per cent vacancy rate for A grade assets, 8.4 per cent for B grade and 12.6 per cent for C grade.

 “A grade assets in particular are facing high demand, with 1,856sqm of net absorption and no supply additions.

“Only the D grade segment recorded negative demand, while C grade assets saw significantly higher withdrawals than demand.

“Withdrawals across the market totalled 7,766sqm in the six months to January 2016, while net absorption totalled 5,715sqm over the same period.”

Ms Wilson said 25,600sqm of new space is due to enter the market in 2016, followed by 35,000sqm in 2018 – though substantially more stock is mooted.

 

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

 

Analysis – PARRAMATTA MARKET

Headline comments:

  • Total vacancy in the Parramatta office market decreased over the six months to January 2016
  • The decrease was due withdrawals and net absorption
  • Only the D Grade segment recorded negative demand and an increase in vacancy over the period
  • There is no space in the pipeline in 2017

 

Vacancy analysis:

  • Vacancy decreased from 7.4 per cent to 5.6 per cent over the 6 months to January 2016
  • The decrease was due to 7,766sqm of withdrawals and 5,715sqm of net absorption
  • 600sqm of space was added over the period

 

By grade:

  • A Grade – vacancy decreased from 2.4 per cent to 1.7 per cent due to 1,856sqm of net absorption
  • B Grade – vacancy decreased from 11.0 per cent to 8.4 per cent due to 4,816sqm of net absorption and 1,657sqm of withdrawals. Supply additions totalled 600sqm
  • C Grade – vacancy decreased from 17.1 per cent to 12.6 per cent due to 4,599sqm of withdrawals and 686sqm of net absorption
  • D Grade – vacancy increased from 2.9 per cent to 3.1 per cent due to -1,643sqm of net absorption. Withdrawals totalled 1,510sqm

 

Future supply:

  • A total of 25,600sqm of new space is due to enter the market in 2016
  • No space is planned for 2017
  • 35,000sqm is due to come online from 2018 onwards
  • 55,388sqm of stock is mooted

 

Key market indicators, Parramatta (aggregate)