The Property Council of Australia (PCA) released its Office Market Report for mid-2016 on 4 August. For the Sydney release it was a full house at the Westin Hotel. The anticipation brings back memories of the movie Trading Places with everyone waiting for the release of the price of oranges. As usual a great turnout and a buoyant crowd. Great job by the PCA and the figures below are those of the PCA.
Sydney CBD office vacancy rate is not plummeting:
It decreased marginally from 6.3% to 5.6% over the first 6 months of 2016. This was not too much of a surprise although some would have preferred it to be 3-4%. The more interesting part is the underlying data.
Withdrawals were huge at 110,731 m2 or close to 2% of the market. This is the highest level of withdrawals in over 8 years. Without that level of withdrawals vacancy would have gone the other way.
New supply was 126,474 m2 or close to 2.5% of the market. That is a big injection of supply and fully anticipated by the market for years. It is good to see new stock in the market and great to see the Barangaroo project coming alive after so many years of planning and construction.
Positive net absorption (true demand) for the first half was 50,500 m2. This is above the annualised average but down on more recent periods.
The panel discussion was entertaining as always. All in all a great breakfast and some healthy figures to start the second half of 2016. More detailed analysis to come.
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