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

3.7%

Vacancy Rate

as at Jul-19

-3,623 sqm

Net Absorption

6 months to Jul-19

7.1%

Rental Growth

A Grade net effective, 12 months to Jun-19

17%-21%

Incentives

Indicative range, as at Jun-19

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 continued on its steady decline of more than 5 years and now sits at 3.7%, within 0.1% of the lowest level on record.

A new all-time low vacancy rate could be set soon but this will likely be short-lived as new supply is delivered.

Rents

Effective rents across the Sydney CBD continue to record increases, albeit at minimal rates of growth in some segments.

Source: Cadigal Research

Tenant Demand
Net Absorption

*6 months to July 2019
Source: Property Council of Australia

Whilst the vacancy rate is very low, so too has been tenant demand with Net Absorption well below the long term average over 2016-2018.

The 1st half of 2019 yielded -3,263sqm of net absorption and unless tenant demand picks up substantially over the 2nd half, the CBD will see the 1st year of negative net absorption in the last 10 years.

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 delivered in a relatively orderly fashion.

Source: PCA/Cadigal

Tenant
Enquiry

Source: Cadigal Research

After substantial falls in each of the last three quarters, the quantum of tenant enquiry seeking Sydney CBD office space remained relatively static over Q2 2019.

Tenant Enquiry
by Industry Sector

Financial Services is currently the dominant industry sector driving tenant enquiry, contributing almost 30% of the total, and more than double the next largest - Public Administration and Safety and Information Media and Telecommunications.

Source: Cadigal Research

North
Shore

7.9%

Vacancy Rate

North Sydney, as at Jul-19

11,507 sqm

Net Absorption

North Shore, 6 months to Jul-19

0.7%

Rental Growth

North Sydney A Grade net effective, 12 months to Jun-19

19%-23%

Incentives

North Shore indicative range, as at Jun-19

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 7.9% over the first half of 2019, yet remains well below the long-term average.

The expected improvement in net absorption will help the vacancy rate return to it's downward trend.

Rents

In North Sydney, effective rental growth continues to be strongest in B Grade space.

The expected acceleration in tenant demand will underpin moderate effective rental growth over the medium term.

Source: Cadigal Research

Tenant Demand
Net Absorption

*6 months to July 2019
Source: Property Council of Australia

The improvement in tenant demand witnessed on the North Shore over 2018, continued into 2019, with 11,507sqm of net absorption recorded over the first half of the year.

The pace of demand is expected to pick up as uncommitted new space, plus backfill space, is let-up.

Supply Completions
2015-2024

An unprecedented amount of new supply is expected to be delivered to the North Shore over 2019-2021

Source: PCA/Cadigal

Tenant
Enquiry

Source: Cadigal Research

Tenant enquiry on the North Shore rebounded over the first half of 2019, after falling 17% in the previous 6 months.

The rebound in enquiry, whilst mild, supports improved tenant demand in the near term.

Tenant Enquiry
by Industry Sector

The Information Media & Telecommunications sector is currently the largest source of enquiry on the North Shore, closely followed by Financial Services.

Financial Services is noteworthy as it contributed just 5-6% of enquiry a year ago.

Source: Cadigal Research

For more information
Contact

Lok So

Research Director

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