The office vacancy rate in the Sydney CBD will hit 3 per cent by the end of 2019 due to an inadequate supply of new office space, according to new forecasts from BIS Oxford Economics. The research house put the CBD vacancy rate at 4.6 per cent in December and said this would continue to decline over the next two years as “low net additions are outpaced by moderate demand.”
BIS Oxford Economics expects a smiliar scenario to occur outside of the CBD with the metropolitan vacancy rate expected to fall to 4.5 per cent by December 2019, down from 5.4 per cent in December 2017.
“The problem for office occupiers looking to expand is there will be no short-term supply relief, with net additions staying low until at least the end of next year,” said Lee Walker, BIS senior project manager and author of its latest Sydney office report.
“BIS Oxford Economics forecast metro-wide net additions (office completions less withdrawals) at less than 100,000 square metres per annum and close to zero in the CBD over the two years to December 2019,” Mr Walker said.
BIS forecasts the imbalance will continue until at least 2021, when enough supply is expected to be completed to rebalance the market. It expects that rent will continue to increase in spite of the office projects currently underway.
“That’s good news for building owners, but not for tenants looking to negotiate leases in the near term,” Mr Walker said.
Article source: http://www.afr.com/real-estate/commercial/leasing/sydney-office-vacancy-rate-to-hit-3-per-cent-by-end-of-2019-bis-oxford-economics-20180509-h0ztz3?btis
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