Little guys lead office demand growth
Small businesses drove a huge increase in demand for office space across Australia during the second quarter of 2016, with record levels of enquiry.
More than 620,000sqm of demand was recorded nationwide for the quarter – a 22% jump on the first quarter of the year – according to Colliers International research.
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And small businesses led the charge, with an 85% increase in tenants seeking less than 1000sqm of space, and a 51% boost year-on-year.
The demand translated into 346 deals for more than 260,000sqm of space for the year to date, Colliers’ Office Demand Index report shows.
This quarter, we have seen more small businesses enquire for office space than ever previously recorded
“Small businesses are currently most active in the Sydney market, where we have seen almost triple the amount of space enquired for in the second quarter of 2016 compared to the first quarter,” the report says.
“The amount of space enquired for in the Melbourne market also more than doubled in Q2 2016, compared to Q1 2016.”
“Small businesses were also increasing their enquiry in Brisbane and Adelaide, recording quarterly rises of 25% and 15% respectively.”
But Adelaide’s overall enquiry was down 10% on the first quarter of 2016, with demand for space larger than 3000sqm dropping away.
Brisbane recorded 65,610sqm of demand in the second quarter, a 50% boost on Q1, with tenants seeking space larger than 3000sqm doubling.
Demand in Canberra fell away significantly during Q2, though it was up 24% on the same period last year.
Small businesses are currently most active in the Sydney market, where we have seen almost triple the amount of space enquired for
Perth saw 25,182sqm of demand – a significant drop on the first quarter, with no tenants seeking space larger than 1000sqm.
Colliers’ report says that while office space demand from small businesses is booming, there is also a groundswell of enquiry from larger enterprises.
“This quarter, we have seen more small businesses enquire for office space than ever previously recorded, however this doesn’t mean large business activity has stopped,” the report says.
“The second quarter of 2016 has seen large businesses increase their enquiry for 3000sqm-plus space by 23%, compared to the same period last year.”
“While small businesses are currently the most active in terms of demand and transactions, we expect to see larger businesses increasing their transactional activity into the second half of this year.”