Adelaide fights back in office leasing space race

Adelaide is now on par with Sydney and Melbourne when it comes to demand from larger businesses seeking office space, according to research and experts from commercial agency Colliers International.

The total amount of office space enquired for has jumped by 44% in the city of churches in the year to date, compared to the same period last year.

And it’s the insurance sector that’s providing the catalyst for the increasing interest, according to Colliers’ associate director for office leasing in South Australia, Jeevan Deut.

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About 70% of Adelaide office space enquiries are coming from small businesses seeking space less than 1000sqm, the research says, but insurance companies chasing larger spaces are fuelling bigger demand.

“It is interesting to note that the number of larger business looking for space greater than 3,000sqm in Adelaide is on par with the likes of Brisbane and Sydney,” Deut says.

With a sound level of enquiry and anticipated tenant movement, we have passed a trough in tenant demand and are now trending back up

“The average size of a business looking for office space in the Adelaide market has also increased from prior year, up from 587sqm to 1030sqm.”

“It seems that the insurance sector is driving the majority of the larger requirements, followed by the education and training sector and the property services and government sectors.”

Meanwhile, the average size of leasing deals actually finalised has almost tripled, from 290sqm in the first five months of 2016 to 777sqm in the corresponding period this year.

Deut says Adelaide’s office leasing market has weathered the worst of a demand downturn and is now on the rebound.

“We are finding the leasing market is now starting to turn,” he says.

“With a sound level of enquiry and anticipated tenant movement, we have passed a trough in tenant demand and are now trending back up.”

“Moving into the second half of 2017, we expect the demand for office space in Adelaide to rise and larger businesses to transact.”