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 8.2 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.
Sydney CBD posted a decrease in vacancy in the six months to July 2012
This was due to demand and withdrawals
Only the Premium Grade segment experienced a vacancy increase over the period
There is a steady stream of space due to come online over the next 18 months
Vacancy in the Sydney CBD office market decreased from 9.7 percent to 8.2 percent
This was due to net absorption of 45,309 sqm and withdrawals of 42,237 sqm
13,225 sqm of space was added over the period
Vacancy increased from 7.4 percent to 7.8 percent
This was due to 2,450 sqm of supply additions
-551 sqm of demand was recorded over the period
Vacancy decreased from 9.2 percent to 7.5 percent
This was due to 21,315 sqm of withdrawals and 18,021 sqm of net absorption
7500 sqm of space was added to the market over the period
Vacancy decreased from 10.1 percent to 7.8 percent over the period
This was due to 21,093 sqm of net absorption and 19,662 sqm of withdrawals
2397 sqm of space was added to the market over the period
Vacancy decreased from 13.1 percent to 12.2 percent
This was due to 5384 sqm of net absorption and 1260 sqm of withdrawals
878 sqm of space was added to the market over the period
48,959 sqm of new stock is due to enter the market in the second half of 2012 with 34 percent pre-commitment
110,849 sqm of projects are scheduled to be completed in 2013 with 59 percent pre-commitment
317,160 sqm is due to come online from 2014 onwards
A total of 180,391 sqm of space is mooted
Key market indicators, Sydney CBD (aggregate)
Jul 12 (%)
Jan 12 (%)
|Net absorption, 6 months to Jul 12 (sqm)
||Net absorption, 12 months to Jul 12 (sqm)|
NSW Executive Director,
02 9033 1904 or 0419 695 435
National Research Manager,
02 9033 1943 or 0410 449 210
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