Office leasing soars in sydney

Sydney Harbour Photo: Wikimedia Commons

Office leasing has soared in Sydney in the first half of the 2015, as New South Wales leads the way in Australia's commercial property sector.

According to Colliers International, there has been a 13 per cent increase in the number of of leasing deals across Australia in 2015, compared to the first half of 2014. The amount of space leased, in square metres, is up 22 per cent from 198,360sqm last year to 241,551sqm.

New South Wales is powering ahead, with 112, 937sqm leased year to date, almost double the amount in the first half of 2014.

Cameron Williams, Colliers International National Director of Office Leasing, highlights increased traction nationally at the larger end of the market.

"This is in contrast to 2014 enquiry data, which is a reflection of what we are seeing on the ground – larger firms are driving demand for office accommodation in 2015 compared to 2014, when we saw smaller space in strong demand."

"Our enquiry data for the second quarter of 2015 also shows a significant shift in the industries searching for office space," he adds. Indeed, last year, the government dominated activity, but now the business service, communications and finance industries are making up the majority of enquiries and leasing deals.

Businesses searching for substantial office accommodation were driving demand across key office CBD markets, with enquiries for office space nationally up 31 per cent from  Q2 2014 compared to Q2 2015 for office space in the 1,000sqm - 3,000sqm category.

Sydney, in particular, has seen demand surge 25 per cent in Q2 2015 compared to Q1 2015. Active tenants include Australia’s larger domestic banks, Atlassian, Dropbox, Expedia and Service Now.

"The big Change has been growth," says Williams. "The tenants that are in the market at the moment are predominantly growth driven."

"The terms being offered to prospective tenants are quite different to what would have been offered 12 to 18 months ago," he adds. "Incentives peaked across the market in late 2014 and sub-markets such as the midtown and the western corridor are really starting to tighten, particularly for larger occupiers."

Despite reports suggesting market conditions are subdued, though, Canberra has also seen a "considerable amount of activity", notes Colliers.

Michael Ceacis, Director of Government Services, Office Leasing at Colliers International says that while the Canberra market appears focused on attracting large tenants, who are largely the Commonwealth, he is witnessing "significant activity" in the sub 1,000sq m leasing market.