Market
Intelligence

Market Dashboard

A collection of Research, Market Intelligence, News and Insights. Discover what's happening behind the scenes in the Sydney Office Leasing market and stay on top of emerging trends in commercial real estate.

Sydney
CBD

5.6%

Vacancy Rate

as at Jul-20

-58,675 sqm

Net Absorption

6 months to Jul-20

-13.4%

Rental Growth

A Grade gross effective, 12 months to Sep-20

26%-31%

Incentives

Indicative range, as at Sep-20

The arrows indicate the direction of Cadigal’s expected change over the next 12 months.

Vacancy
Rate

Source: Property Council of Australia

The overall vacancy rate spiked up over the first half of 2020, after coming within 0.1% of the lowest mark on record in 2019.

Despite the latest rise, the vacancy rate remains well below the long-term average (8.7%) and still below the 10-year average (6.7%).

Rents

Effective rents peaked in Dec-19 and have fallen 7.2%-9.5% in the 6 months to Sep-20, driven predominantly by rising incentives.

Source: Cadigal Research

Tenant Demand
Net Absorption

*6 months to July 2020
Source: Property Council of Australia

Net absorption has been weak in the CBD for several years with an annual average of just 3,230sqm tallied over 2016-2019.

2019 saw the first year of negative net absorption in 10 years and tenant demand weakened further over the first half of 2020 with -58,675sqm recorded.

Supply Completions
2015-2024

Following substantial new supply in 2015-2016, there were very few completions over 2017-2019.

Supply will pick up over 2020-2024 but is expected to be below the long-term average over the 5 years.

Source: PCA/Cadigal

Tenant
Enquiry

Source: Cadigal Research

The quantum of tenant enquiry seeking Sydney CBD office space spiked up over Q3 2020. However, this is expected to be an anomaly as much of the enquiry, whilst not concluded, is progressing very slowly.

Tenant Enquiry
by Industry Sector

Financial Services is the largest industry sector driving enquiry, accounting for 26% of the total. Current enquiry is diverse, with just 3 sectors contributing more than 8% of the total.

Source: Cadigal Research

North
Shore

8.0%

Vacancy Rate

North Sydney, as at Jul-20

-23,281 sqm

Net Absorption

North Shore, 6 months to Jul-20

-7.0%

Rental Growth

North Sydney A Grade net effective, 12 months to Jun-20

23%-30%

Incentives

North Shore indicative range, as at Jun-20

The arrows indicate the direction of Cadigal’s expected change over the next 12 months.

Vacancy
Rate

Source: Property Council of Australia

The overall vacancy rate in North Sydney rose to 8.0% over the first half of 2020, yet remains well below the long-term average.

The vacancy rates in Crows Nest/St Leonards and Chatswood are slightly higher than in North Sydney and have, similarly, risen over 2020.

Rents

In North Sydney, effective rents peaked in the 2nd half of 2019 and have fallen over 2020.

Prime stock has outperformed secondary, with Premium grade seeing the smallest falls and B grade the largest, thus far.

Source: Cadigal Research

Tenant Demand
Net Absorption

*6 months to July 2020
Source: Property Council of Australia

Net absorption has been weak across the North Shore with -23,281sqm recorded over the 6 months, and -30,671sqm over 12 months, to Jul-20.

With a long-term average of just 3,685sqm per annum, net absorption has not been strong on the North Shore for an extended period of time.

Supply Completions
2015-2024

The North Shore is expected to see a substantial amount of new supply over 2020-2024, almost 50% more than the Long-term average, over the 5 years.

Source: PCA/Cadigal

Tenant
Enquiry

Source: Cadigal Research

Tenant enquiry for the North Shore fell 7.3% over the first half of 2020, to 171,454sqm.

North Shore enquiry levels have been on a downward trend over the last 3 years with current enquiry down 32% on the Jun-17 total.

Tenant Enquiry
by Industry Sector

North Shore enquiry is currently dominated by 3 industry sectors - Financial Services, Information Media & Telecommunications and Advertising Services - accounting for a combined 60% of the total.

Source: Cadigal Research

For more information
Contact

Lok So

Research Director

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