Christmas has thrown us a curveball this year - the usual pre-Christmas rush by tenants to close out leasing deals before the 25th just hasn’t fired.
In the past, it’s like Christmas adds fuel to deals that may have been languishing. Most agents and lessors who have been in the market for a few years can attest to times past when it gets to mid November and transactions that have been coasting suddenly get ignited and there’s a rush to get terms agreed, documents signed, bank guarantees issued and trades instructed before we break for the end of year holidays, with spirited negotiations firing right up until Christmas eve.
2017 has been different. And it’s been different for a few decent reasons. Tenant demand exhausted itself in the first three quarters of 2017 and the expected acceleration in the last quarter just hasn’t happened. Yes we’ve had huge rental growth and yes vacancy rates are historically low, but the lack of demand at end of year is a point of concern for how the market will respond in 2018.
I suspect that the limited supply of stock, strong employment and investment will keep rents stable in 2018. We’re seeing incentives increase on some deals, but in cases where office space is offered with quality fit outs and furniture, transactions are being done at low incentive levels and strong rents.
Coworking trends continue to eat into office demand. Green Street Advisors issued a report in November 2017 stating there will be about 14,000 co-working locations worldwide by the end of this year, compared with 600 in 2010. Now that’s growth! This is an increasing challenge for lessors to compete with, but it can also be seen as a field of opportunity for creative thinkers.
And now for some stats of our own. We’re pleased to report our leasing team concluded over 100 leasing deals for the 2017 calendar year. Our momentum has been a result of proactive canvassing, quality marketing, team energy and most importantly, sensational clients and quality properties. It makes it much easier to do our job when we get to work with such great people! So we thank you.
To all our clients, customers and colleagues, we wish you and your family a Merry Christmas and a safe new year. Is there a better place to work than Sydney City and I’d have to say, it’s getting better every year.
All the best,
ANTHONY HARRIS
M: 0409 319 060
Read full magazine here: https://joom.ag/bnUL
Ray White’s top 10 listings for December: (Click on address to view listing)
Level 3, 441 Kent Street Sydney
Suite 12.02, 25 Bligh Street Sydney
Part floor 23, 9 Castlereagh Street Sydney
Level 6, 9 Barrack Street Sydney
Part level 3, 22 Market Street Sydney
Part level 9, 46 Market Street Sydney
Level 4, 40 King Street Sydney
Level 2, 1 Barrack Street Sydney
Level 4, 86 Liverpool Street Sydney
Suite 8.03, 46 Market Street Sydney