National CBD offices at highest absorption levels in 11 years
Surging tenant demand has seen net absorption levels across capital city office markets hit the highest level seen since before the global financial crisis.
Research from real estate agency JLL shows the quarterly net absorption across CBD office markets is in its strongest position since the fourth quarter of 2007, at 151,200sq m nationally.
The measure, which tracks the occupancy of office space, including new supply and tenant movements, found national office space vacancy has dropped 1.8 percentage points year-on-year, which had driven the national vacancy rate down to just 9.1% in the third quarter of 2018.
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JLL head of research Australia, Andrew Ballantyne, says that as companies increased headcounts, positive activity in the commercial office leasing spaces will continue.
“The strength of the office leasing market was reflected in the third quarter of 2018’s net absorption figure — the strongest quarterly result since the fourth quarter of 2007,” Ballantyne says. “While Melbourne continues to be the standout performer, the leasing market upturn is more diverse with above-trend net absorption in Canberra, Adelaide, Brisbane and Perth.”
Brisbane CBD is recovering, gaining positive momentum. Over the past 12 months, net absorption has totalled 39,600sqm — 29% above the 40-year average of 30,600sqm.
Vacancy rates in Melbourne have tightened a further 0.6% since the previous quarter to 4%, with the market recording 79,900sqm of net absorption in the third quarter.
The expansion of professional services firms and increased centralisation contributed to the tighter space market.
Sydney’s CBD recorded the lowest net absorption compared to the other measured cities. Only moving 8800sqm in the past 12 months to September, vacancy rates sit at 4.7%.
Adelaide recorded its strongest performance since late 2008, with positive net absorption of 14,700sqm, but Perth vacancy levels remain high at 22%.
This article originally appeared on www.theaustralian.com.au/property.
