The Sydney CBD commercial office market has stabilised after a period of weak demand and rising vacancies, according to the Property Council of Australia’s latest Office Market Report.
The vacancy rate across the CBD fell from 9.7 percent to 8.3 percent in the six months to July 2012, driven by a combination of demand and stock withdrawals.
“Demand has returned to normal levels, with net absorption totalling 45,309 sqm over the six months to July,” Property Council NSW Executive Director Glenn Byres says.
“Matched with high stock withdrawals of 42,237 sqm, the vacancy rate has dropped back to a level last seen 18 months ago.
“It is also worth noting that the majority of Sydney’s supply pipeline over the coming years has pre-commitments attached, including Barangaroo.”
The vacancy rate for Premium floor space rose from 7.4 percent to 7.8 percent, with 2450 sqm in supply additions compounded by net absorption of -551 sqm.
The combination of 21,315 sqm of stock withdrawal and 18,021 sqm of net absorption culled the A Grade vacancy rate from 9.2 percent to 7.5 percent.
A similar combination of factors also saw a cut in the B Grade vacancy rate from 10.1 percent to 7.8 percent and C Grade from 13.1 percent to 12.2 percent.
A drop in the D Grade vacancy rate from 8.4 percent to 7.7 percent was solely driven by net absorption of 1363 sqm.
Mr Byres says 48,959 sqm of new stock is due to enter the market before the end of 2012 with a further 110,849 sqm projected to come online next year.
For further comment:
Glenn Byres, NSW Executive Director, 02 9033 1904 or 0419 695 435
John Nguyen, National Research Manager, 02 9033 1943 or 0410 449 210