Posted by
Tim Green Commercial
on 05/08/2011
The latest research from the Property Council of Australia shows
a strong recovery in the Australian commercial property market,
despite an overall increase in office vacancies. Key market
indicators measured by the Property Council's latest Office Market
Report (released in early August) shows net absorption figures at
332,922 sqm over the six months. This figure demonstrates the
increased demand for office space in many Australian regions
including premium CBD markets.
Increase in demand with a faster increase
supply
Despite net absorption of commercial property nationwide being
nearly double the historic rate, office vacancy rates climbed to an
average of 10%. This was largely due to a substantial increase in
office space supply. A total of 571,142 sqm of new office supply
was added to the market over the past six months, which is again
almost double the historic average supply of 316,635 sqm.
"Such a swift rebound in demand for office space is yet another
sign of the relative health of the Australian economy," says the
Property Council's Acting CEO Ken Morrison. Other international
sectors are experiencing much slower rates of recovery, with the US
reporting an average vacancy rate of 14.8% in major metropolitan
areas including New York.
Tenant demand on the rise and new developments trending
upwards
According to the report, tenant demand for office space lease in Sydney CBD
has recorded its strongest growth in the past three years.
Melbourne CBD is enjoying lower vacancy rates and record level
demands for commercial real estate. Meanwhile, the latest data from
the Australian Bureau of Statistics shows that residential
development approvals throughout Australia have fallen by 3.3% but
commercial approvals are on the rise. For investors looking
for property sales,
Sydney should offer a number of opportunities with an
additional 66,705 sqm of new office space supply scheduled for the
rest of 2010 alone.
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