Sydney’s CBD office market vacancy could hit a record-low of 3 per cent within a year as new supply races to catch up with tenant demand.
With the tightening of Sydney’s office market, average net effective rents are expected to increase by 15 per cent, with average premium net face rents passing $1,200 per square metre by December next year. Premium net face rents in the Sydney CBD are currently averaging $1,071 per square metre.
The forecast on vacancy and rents means good news for major landlords with office holdings in Sydney such as Charter Hall, GPT, Mirvac, Investa and Dexus. Last week, Dexus booked in a $1.13 billion portfolio boost.
500,000 square metres of development supply in the pipeline, 35 per cent of which is pre-committed, is expected to rebalance the market eventually.
The vacancy is expected to close in on the 10-year historical average of 7.3 per cent by 2024.
Article source: https://www.afr.com/real-estate/sydney-office-vacancy-to-hit-record-low-of-3-per-cent-20180626-h11vd9
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