Sydney CBD Office Demand at Highest Level in Six Years: Dexus

Dexus Research has released the Office Demand "Barometer" for Sydney's CBD for the quarter ended June 2017.

According to Dexus, the barometer increased in the June 2017 quarter to the highest level recorded since late 2010, signalling improving conditions for leasing demand in office buildings in the Sydney CBD

Dexus General Manager Peter Studley said: “The lead indicators for Sydney office demand are improving, with the Barometer reaching its highest level in six years.

“The main factors driving the Barometer higher were uplifts in ANZ job advertisements and business confidence.

“A firming labour market has been a significant driver of office demand in NSW. Rising job advertisements are a sign that companies are becoming more confident about hiring staff.

“The NSW economy added 42,000 jobs over the past year, with many of these in the business services sector.

“Leasing enquiries have predominantly been from the business services sector followed by the IT, and health and community services sectors. Enquiry has also been skewed to smaller tenancies, reflecting growth among small to medium enterprises.

 “Although the Barometer has strengthened, actual net absorption of office space has been constrained by a shortage of space. Sydney’s vacancy rate has tightened to the lowest level in nine years.

“The combination of positive conditions for demand and a declining level of available space is leading to rental growth in the Sydney CBD."

Dexus’s Office Demand Barometer is a specialised model providing a leading indicator for conditions which determine the level of leasing demand for Sydney CBD over the next six months. The Barometer is expressed as a percentage of occupied stock.