As we hit our strides in 2018 and get into the year properly, we’re starting to ask the question - are we at the top of the rental cycle?
The Sydney office rental market may very well be near its peak, however with limited new supply we expect rents to remain firm. There’s no doubt that the rapid pace of rental growth we saw in 2017 has ended.
Low vacancy rates have led to landlords becoming very focused on renewing existing tenants. The focus allows for capturing significant market rental uplift from leasing deals that may have been struck two or three years ago and are now at option and review to market stage.
The result of this is we are seeing tenants being served with ‘market review’ notices, sometimes 20%-30% above their current rental. This rental jolt is bringing tenants out to inspect vacant properties for lease, however we’re anecdotally finding they soon come to the realisation that rents have increased and eventually agree to significant rental uplift when renewing in their current location.
So what does this mean for the market? Landlords with vacant properties will now need to compete harder to secure tenants from competing assets, which will bring more balance back to the market. The rush of tenants vacating buildings set for demolition is over and leasing transaction times are now more extended.
Our leasing team is low on stock, so we welcome an opportunity
to speak with you if you own a commercial property and need help securing your ideal tenant.
All the best,
ANTHONY HARRIS
M: 0409 319 060
Read full magazine here: https://joom.ag/44QY
Ray White’s top 10 listings for February: (Click on address to view listing)
Terrace 40, 42 Young Street Sydney
Suite 28.02, 1 Farrer Place GPT Sydney
Suite 9.03, 46 Market Street Sydney
Level 1, 387 George Street Sydney
Level 6, 23 O'Connell Street Sydney
Level 2, 1 Barrack Street Sydney
Part floor 23, 9 Castlereagh Street Sydney
Suite 2.01, 24 Hickson Road Sydney
Part Level 3, 22 Market Street Sydney
Level 4, 86 Liverpool Street Sydney