The Quarterly report CBD commercial office market will be the prominent player in 08. A greater in booking activity is likely to take place with businesses re-examining picking a purchasing as the costs of borrowing pipe the bottom line. Strong tenant demand underpins a new round of construction with several new risky buildings now likely to proceed Email Extractor.
The vacancy rate is likely to fall before new stock can comes onto the market. Strong demand and a lack of available options, the Quarterly report CBD market is likely to be a key beneficiary and the standout player in 08.
Strong demand arising from business growth and expansion has fueled demand, however it has been the decline in stock which has largely driven the tightening in vacancy. Total office inventory declined by almost 23, 000m² in Economy is shown to August of 2007, representing the biggest decline in stock levels for over 5 years CBT Email Extractor.
Ongoing solid white-collar employment growth and healthy company profits have sustained demand for property in the Quarterly report CBD over the second half of 2007, resulting in positive net absorption. Driven by this tenant demand and dwindling available space, rental growth has accelerated. The Quarterly report CBD prime core net face rent increased by 11. 6% in the second half of 2007, reaching $715 psm every year. Pay outs offered by landlords continue to decrease.
The sum of the CBD office market absorbed 152, 983 sqm of property during the 12 months to June 2007. Demand for A-grade property was particularly strong with the A-grade off market absorbing 102, 472 sqm. The premium office market demand has decreased significantly with a negative absorption of 575 sqm. In comparison, a year ago the premium office market was absorbing 109, 107 sqm.
With negative net absorption and rising vacancy levels, the Quarterly report market was struggling for five years between the years 2001 and late 2005, when things began to change, however vacancy stayed at at a fairly high 9. 4% till June 2006. Due to competition from Brisbane, and to a smaller extent Melbourne, it has been a real struggle for the Quarterly report market in recent years, but its core strength is now showing the real outcome with most likely finest and most comfortably based performance indicators since early on in 2001.
The Quarterly report office market currently recorded the third highest vacancy rate of 5. 6 percent when comparing all the other major capital city office markets. The highest increase in vacancy rates recorded for total property across Australia was for Adelaide CBD with a slight increase of 1. 6 percent from 6. 6 percent. Adelaide also recorded the highest vacancy rate across all major capital cities of 8. 2 percent.
The city which recorded the lowest vacancy rate was the Perth commercial market with 0. 7 percent vacancy rate. In terms of sub-lease vacancy, Brisbane and Perth were one of the better performing CBDs with a sub-lease vacancy rate at only 0. 0 percent. The vacancy rate could additionally fall further in 08 as the limited offices to be delivered over the following two years come from major office refurbishments which much was already committed to.
Where the market is going to get really interesting is at the end of this year. If we assume the 80, 000 pillow metres of new and renewed stick re-entering the market is absorbed this year, coupled with the minute amount of stick additions entering the market just last year, vacancy rates and compensation levels will really plummet.
The Quarterly report CBD office market has had off within the last 12 months with a big drop in vacancy rates to an all time low of 3. 7%. It’s been accompanied by rental growth of up to 20% and a marked decline in pay outs over the identical period.
Strong demand arising from business growth and expansion has fuelled this trend (unemployment has removed to 4% its lowest level since November 1974). However it has been the decline in stock which has largely driven the tightening in vacancy with limited space entering the market yearly two years.
Any assessment of future market conditions should not ignore some of the potential storm confuses coming. If the US sub-prime crisis causes a liquidity problem in Australia, corporates and consumers alike will find debt more expensive and harder to get.
The Reserve Bank is continuing to lift rates so that they can quell inflation which has in turn caused an increase in the Australian dollar and oil and food prices continue to climb. A combination of all of those factors could serve to dampen the market in the future.
However, strong demand for Australian items has made it easier for the Australian market for you to relatively un-troubled to date. The outlook for the Quarterly report CBD office market remains positive. With supply expected to be moderate over the next few years, vacancy is set for you to low for the home two years before increasing slightly.