Good news for office landlords - up to 75 percent increases in leasing spreads means greater gains from rents in Sydney this year. Leasing spread indicates the difference between the amount a shop or office is currently rented for and the price it is rented for once there is a new lease.
The new Metro rail project also means that office space supply decreases, further benefiting landlords.
Investa's analysis across 16 separate leasing transactions in the 12 months leading to September 2017 showed that the average leasing spread was 30.8 percent.
"Positive leasing spreads are one of the contributing factors to the feeding frenzy surrounding the acquisition of prime and secndary assets in Sydney," Investa's Michael Cook said.
As prices rise, yields on Sydney offices have been falling.
Image source: Josh Robenstone
Article source: http://www.afr.com/real-estate/landlords-set-to-enjoy-sydney-office-leasing-spread-20180109-h0g0ju
Ray White’s top 10 listings for January: (Click on address to view listing)
Level 11, 61 York Street Sydney
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