Strong Employment Growth Is A Driver For Sydney Office Demand

DEXUS Research has released its latest DEXUS Office Demand Barometer, a leading indicator for conditions which determine the level of leasing demand for Sydney CBD office space as a percentage of occupied stock over the next six months.

The DEXUS Office Demand Barometer eased in the past quarter, but remains in positive territory, indicating that conditions for tenant demand in Sydney are likely to remain positive over the next six months.

The DEXUS Office Demand Barometer registered 1.1 per cent in September, a decrease of 0.4 per cent from 1.5 per cent in the June 2015 quarter.

DEXUS General Manager, Research Peter Studley said: “Volatility in the Australian share market was a major influence on the Barometer with the S&P/ASX index falling 8.0 per cent over the past three months."

“Subdued confidence was also a factor, with the latest NAB Business Confidence Index for the finance, business, and property sectors slipping mildly in September.

“Office property owners can find comfort in the fact that this quarter’s easing is the result of movements in the more volatile components of the Barometer.

“The more important long term drivers of office demand, including job creation and growth in the US economy, remained firm, keeping the Barometer in positive territory.

 “Importantly, job advertisements are up and employment growth remains solid, particularly in NSW, where we’ve seen around 118,800 new jobs created over the past year, just over half the amount created nationally.

“Accordingly an estimated 26,000 square metres of office space was taken up in the Sydney CBD in the September quarter, and a total of 148,000 square metres over the past year.

“Solid employment growth is good news for office demand, and we anticipate demand for Sydney office space will remain positive in the near future.”

Click here to view the DEXUS Office Demand Barometer.