Sydney CBD office market demand strong
The Sydney CBD office market continues to perform well above the national average with vacancy rates decreasing over the past six months, according to the Property Council of Australia’s latest Office Market Report.
"Sydney’s office market continues to have the lowest vacancy rate and the strongest demand of all capital cities," NSW Executive Director Jane Fitzgerald said today.
“Sydney’s CBD saw positive demand at the top end of the market – in the Premium Grade segment – with a significant amount of space coming online in the next six months,” Ms Fitzgerald said.
The vacancy rate across the market dropped slightly to 5.6 per cent in the six months to July 2016 down from 6.3 per cent in January.
“While the vacancy rate for premium grade assets increased from 8.1 per cent to 11.3 per cent, reflecting 126,474sqm of new supply, the A grade vacancy rate fell from 5.4 per cent to 4.0 per cent and B grade fell more sharply from 6.8 per cent to 3.5 per cent,” Ms Fitzgerald said.
“Premium grade assets still accounted for the bulk of new demand with 79,170sqm of net absorption”.
“Withdrawals across the market over the past six months totalled 110,731sqm while 126,474sqm of new stock was added.”
Ms Fitzgerald said 140,191sqm of new stock was due to enter the market in the second half of 2016.
“The NSW economy continues to be strong with five of the top 10 office markets in NSW.”
For more information or to purchase the July 2016 Office Market Report, click here.
Media contact: Jane Fitzgerald | E [email protected]
Office Market Report July 2016
Analysis – Sydney CBD market
- Sydney CBD vacancy decreased over the period
- Supply was almost matched by withdrawals
- Demand was concentrated in the Premium Grade segment
- There is a significant amount of space in the pipeline over the next six months
- Vacancy in the Sydney CBD office market decreased from 6.3 percent to 5.6 percent
- 126,474sqm was added over the period while 110,731sqm was withdrawn
- Net absorption totalled 50,500sqm
- Vacancy increased from 8.1 percent to 11.3 percent
- This was due to 126,474sqm of supply additions
- Net absorption totalled 79,170sqm while withdrawals totalled 3,750sqm
- Vacancy decreased from 5.4 percent to 4.0 percent
- This was due to 54,201sqm of withdrawals
- Net absorption was -26,008sqm
- Vacancy decreased from 6.8 percent to 3.5 percent over the period
- This was due to 48,310sqm of withdrawals and 4,227sqm of net absorption
- Vacancy increased from 5.3 percent to 6.0 percent
- This was due to -4,788sqm of net absorption
- Withdrawals over the period totalled 1,428sqm
- Vacancy decreased from 4.2 percent to 3.7 percent
- This was due to 3,042sqm of withdrawals
- Net absorption was -2,151sqm
- 140,191sqm of new stock is due to enter the market in the second half of 2016
- 24,986sqm is due to be completed in 2017
- 66,000sqm is due to come online from 2018 onwards
- A total of 84,000sqm of space is mooted