Colliers Reports Large Office Spaces Are In Top Demand

Strong demand for 3,000 square metre-plus office space is driving activity and growth across Australia’s office sector according to new Colliers International figures. The Colliers International Office Demand Index Quarter 3 (Q3) 2014 Report has recorded a 51 per cent increase in enquiry for office space nationally across the quarter (626,237 square metres ), compared with this time last year (413,538 square metres). Simon Hunt , Managing Director of Office Leasing at Colliers International , said the growth in office demand was being driven by enquiry within the 3,000 square metre-plus market. “Breaking the figures down further, we have seen the greatest spike in demand for office space taking place in Sydney, where space enquired for more than doubled from 102,48 6square metres in Q3 2013 to 235,660 square metres in Q3 2014 – an increase of 130 per cent,” said Mr Hunt. “These Sydney numbers have been driven by a significant rise in demand for office space in the above 3,000 square metres market, where only 29,601 square metres was enquired for in Q3 2013 to 235,660 square metres in Q3 this year.&quot; Canberra also saw an increase in office space demand, with 112,600 square metres in Q3 2014 compared to 58,090 square metres in Q3 2013. This increased was again driven by enquiry into 3,000 square metre-plus space. The Office Demand Index also found increases in demand in Adelaide – up from 29,251 square metres in 2013 to 49,920 in Q3 2014 – and in Brisbane, from 47,095 to 53,687 square metres. The index saw enquiry in Melbourne drop though, down from 166,785 square metres in Q3 2013 to 150,851 in Q3 2014. The decline was primarily due to lower demand the smaller end of the market, with 65,063 square metres recorded in the under-1,000 square metres market in Q3 2013, compared with just 51,001 square metres in Q3 2014. Meanwhile, the 3,000 square metres-plus market saw an increase from 53,500 square metres in Q3 to 61,700 square metres in Q3 2014. Mr Hunt attributed the growing enquiry levels nationally for space over 3,000 square metres to a strong period of business expansion driven by white collar employment growth in the corporate sector. The growth in enquiries is set to increase further as white collar employment growth continues to strengthen in Financial Services, IT, Communications and Healthcare sectors. It is forecast nationally that over 10,000 new jobs would be created in these sectors in 2015. Melbourne is forecast to have the fastest rate of white collar growth in 2015, with a net gain of 6,000 new jobs, with Sydney close behind with a projected 4,000 new jobs. “We are seeing the Information Technology sector remaining very active, with 161 enquiries for 196,819 square metres year-to-date. This time last year this sector was also the most active with 185 enquiries for 132,443 square metre of space,” Mr Hunt said. “This reflects Colliers International research forecasts of a tech-led recovery on the cards for Australia’s CBD office markets as IT &amp; Telecommunications businesses dominate tenant enquiry. &quot;It suggests that the national office market recovery is not just being driven by business services, as it traditionally is, but technology as well. This is a distinct change from previous years.” Michael Cook , Group Executive and Head of Commercial Development and Leasing at Investa , said the results of the report echoed Investa’s experience over the last three to six months. “The recovery is noticeable in the 3,000 square metre range. However, Investa’s success has best been captured in the sub-1,000 square metre tenant range. One and 31 Market Streets and 135 King Street in Sydney have seen strong activity,” Mr Cook said . “Melbourne usually tracks three to six months behind Sydney, but activity in the same sub-1,000 square metre range has also been encouraging. Enquiry levels at Investa’s premium Melbourne asset, 120 Collins Street, have increased markedly of recent times.” The strongest growth and activity has been recorded in Recruitment, Information Technology and Telecommunications and second tier law and accounting firms. With Federal and State Governments focused on improving energy and transport infrastructure, engineering services are expected to be the next growth area.

Colliers Reports Large Office Spaces Are In Top Demand

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