Flexible Workspace Rental Drops as Supply Increases

Sydney accounts an increase in supply of available workspaces that has resulted in rent reduction. According to records, prices dropped by about 12 per cent in the past year due to the augmented competition for the market share as new operators have entered the business and existing operators have expanded their size.  

Parramatta and Pyrmont offers the most affordable rates at an average desk cost of $500 to $650 while Barangaroo and Sydney CBD prices remain strong at desk rents between $800 and $950, respectively. These figures are based on completed transactions, rather than rates advertised on listings.

For the past 12 months, the highest leap on the growth of flexible office space was particularly recorded in the Sydney CBD with 24 per cent increase, followed by North Sydney at 22 per cent. The lower average desk rate of $650 to $700 in North Sydney, compared with the Sydney CBD, significantly opened popularity for the area for prospective tenants.

On the other hand, research noted a 28 per cent increase of supply on hybrid spaces - a combination of serviced office space and co-working space. Also, the supply of co-working spaces grew by 18 per cent. The flexible workspace sector is believed to be heading over the sub-leasing market “to a degree,” with the convenience of privacy and security they offer. 

Article and image source: https://www.commercialrealestate.com.au/news/coworking-rates-tumble-in-sydney-as-supply-booms-847025/

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