Weak demand for office space on the North Shore has seen vacancies rise to their highest levels in five years, according to the Property Council of Australia’s latest Australian Office Market Report.
“The story of the past year is a complete reversal of the trend from 2008, when North Sydney in particular had bucked the trend and seemed immune from the effects of a slowing economy,” said NSW Acting Executive Director Glenn Byres.
“Unfortunately, the past six months have seen slowing demand force vacancy rates up from 11.9 percent to 13.7 percent across the North Shore. Demand fell 29,660sqm – and it was consistent across all grades of office stock.
“The increase in vacancies in North Sydney was more marginal than the average, with a rise from 11 percent to 11.7 percent. This was largely due to a decrease in demand of 5,818sqm.
“More concerning was the performance of the Crows Nest/St Leonards and Chatswood markets.
“In Crows Nest / St Leonards vacancy rates jumped from 12.9 percent to 15.2 percent in the past six months – driven by weak demand of –10,144sqm, the lowest in five years.
“Similarly, demand in Chatswood fell by 13,669sqm and the result pushed vacancy rates from 13.0 to 17.8 percent.
“Our Report also shows a total of 47,653 sqm of stock is due to enter the North Shore market in 2010.
“Overall, the picture shows the North Shore market is feeling the after effects of a sluggish economy and it can only benefit from NSW charting a course back to sustained growth and prosperity.”