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OtherStaff WriterTue 25 Jul 17

Savills' Quarterly Report Reveals Trends Across Nation's Office Market

iStock-520329172_620x380

Australia's office markets have shown some interesting trends, according to Savills' Office Quarter Time report, the company’s data update publication that details trends, activity, benchmarks and economic drivers for office markets around the nation.

According to the report, economic indicators - such as professional job advertisements - revealed that disparities between markets may be starting to normalise.

Sydney continued to lead the way in terms of rental and capital value gains, with effective rents up 35.5% over FY-17 and capital values 23%.

Savills Head of Capital Strategy and Research Chris Freeman said while Sydney’s performance is well known, it is metrics for the other markets that were of most interest to him this quarter.

“Forward indicators such as professional job advertisements showing the strongest rebound in Adelaide (up 13.3%), Perth seeing compression in yields offset the soft rental market as the market nears a floor and Brisbane showing rental growth driven by a ‘re-centralisation’ to the CBD highlight investment drivers for these markets," Freeman said.

“While Sydney clearly led from a transactional perspective, with major sales such as 50% of the MLC Centre and 20 Bridge Street during Q2-17, counter-cyclical investor appetite was apparent for Perth with 109 St Georges Terrace and The Workzone East buildings transacted last quarter.

"Brisbane was also very active with the sales of 120 Edward Street for $142.6 million.

“This is a good sign investors are now seeing the upside of these markets,” he said.

In total the report detailed $14.4 billion of major sales activity ($10m+) over FY-17 and 1.3 million square metres of major leases greater than 1,000 square metres.

Sale volumes were down from the $18 billion record set in FY-16, but remained well above the decade average, led by foreign investors that were responsible for approximately 50% of total acquisition volumes during the year.

Leasing activity remained in line with figures in 2016, with a significant uplift evident in Victoria over the year offsetting a tight Sydney market and fairly subdued activity in QLD and WA.

Mr Freeman said from a demand drivers' perspective Melbourne does appear a standout with economic growth for the state at 4.5%, employment growth at 3.4% and professional job advertisements up 6.4% over the year.

OtherOfficeAustraliaSector
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"TheUrbanDeveloper.com is committed to delivering the latest news, reviews, opinions and insights into the best of urban development from Australia and around the world. "
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Article originally posted at: https://www.theurbandeveloper.com/articles/savills-report-strength-across-nations-office-market