Sydney soars to top of Asia-Pacific office leasing class
The rampant demand for space in Sydney’s office leasing market continues unabated, with the city experiencing the greatest rental growth across the entire Asia-Pacific.
Sydney’s rental growth blew out to 3.9% in the third quarter of 2015 compared to the second quarter of the year, far in excess of other cities across the region, according to a JLL report.
The results in Australia’s largest office market dwarfed gains made in Adelaide and Melbourne, which saw growth of 0.7% and 0.6% respectively over the same period, while Canberra, Brisbane and Perth all lost ground.
Sydney and Tokyo are anticipated to show the highest growth next year
JLL head of office leasing Tim O’Connor says Sydney outshone other office leasing hotspots across the Asia-Pacific and was only just outside the top 10 when compared to the 95 cities surveyed globally.
“Sydney stood out across the region for quarterly rental growth at +3.9%, followed by Hong Kong at +3.5%. The next strongest quarterly uplifts were Shanghai (+2.4%), Beijing (+1.9%) and Bangalore (+1.9%). Several other markets recorded modest rises (1.0-1.5%) including Auckland, Mumbai, Chennai and Osaka,” O’Connor says.
“The annual rental growth for Sydney from Q3 2014 to Q3 2015 was 8.2%, which is a strong result.”
In October, reports of rising rental tension in the Sydney CBD office market began to surface, with face rents starting to rise and incentives diminishing.
O’Connor says the frenzied demand in Sydney is expected to continue well into 2016, again leading the way among Asia Pacific cities.
“Single-digit rental growth is generally forecast across the Asia Pacific region. Among the major markets, Sydney and Hong Kong are likely to experience the strongest rental uplift by year-end 2015, while Sydney and Tokyo are anticipated to show the highest growth next year,” he says.
HOW YOUR CITY PERFORMED (Rental growth Q2 to Q3)