North Shore
March Office Market Report

There are two new office developments currently under construction that, when complete, will add 12.5% of much needed supply to the North Sydney market. Tenant demand has been mixed on the North Shore with moderate net absorption in Chatswood offset by weakness in North Sydney and Crows Nest/St Leonards.

The vacancy rate on the North Shore rose from 7.9% to 8.4% over the second half of 2017, reversing a similar-sized fall in the first half. Current vacancy rates are well below long-term averages in North Sydney and Chatswood, but marginally higher in Crows Nest / St Leonards. Effective rental growth on the North Shore has been strong, across the board. The combination of solid-to-strong face rental growth together with substantial reductions in incentive levels has led to gross effective rental growth in the 13% – 25%pa range.

Looking ahead, tenant demand is expected to improve on the North Shore on the back of robust enquiry levels and boosted by the persistence of very low vacancy rates in the Sydney CBD. Higher net absorption combined with more stock withdrawals will lead to vacancy rates continuing to fall which will, in turn, result in further growth in effective rents.

Click here to download Market Pulse North Shore, March 2018