According to the Commercial Property Guide's Asking Price Index, commercial real estate agents have set asking rents at about 2.5 per cent higher than 3 months ago.
An online commercial property portal, the Commercial Property Guide compile their Asking Price Index with updated weekly data. It measures the change in sentiment of experienced agents who have made tens of thousands of marketing decisions as to the future direction of commercial property.
The index indicates strong demand for commercial space. Australia has undergone a 10 per cent increase in asking rents for commercial property on an annualised basis.
The Commercial Property Guide said this growth is driven by financial services and information technology business expansion. Employment growth is mirrored in the type of workspace that is, and isn't, in demand. Industrial rents are also bubbling along albeit not at quite the same rate as offices. In contrast, retail shop rents have experienced a dramatic decline.
Every six months for the past several years industrial, office and retail asking prices have converged. So that in July 2015, December 2016, July 2016 and then again in December 2016 all three property types converged to have almost identical growth expectations.
This time is different. The pattern has been broken in this winter, as each of the major property types have diverged in their asking rent expectations. Although retail may have initially been too pessimistic.