According to consultants BIS Oxford Economics, the office vacancy rate in the Sydney CBD will fall to just 3 percent by the end of 2019 and hit 4.5 percent in the wider metropolitan market, forcing up rents.

BIS Oxford’s Lee Walker said that for office occupiers looking to expand there would be no short term supply relief. “BIS Oxford Economics forecast metro-wide net additions (office completions less withdrawals) at less than 100,000 square metres per annum and close to zero in the CBD over the two years to December 2019. Walker added that one hundred thousand square metres is around half the average office space added to the market each year over the last 30 years. Demand will be stronger, averaging 150,000 sq m per annum over the next three years, underpinned by “reasonable growth” in the NSW economy, the consultancy forecast.

According to the most recent Property Council of Australia Office Market Report vacancies in the Sydney CBD hit a 10 year low of 4.6 percent in the six months to July, the country’s biggest office landlord Dexus expecting the vacancy number to end up well below 4 percent. Another forecast from agents Colliers International expects the Sydney CBD to hit a 3.5 percent vacancy rate by the middle of 2019. BIS expects the CBD market to swing even further in favour of landlords with the metro market to maintain a sub 5 percent vacancy rate beyond 2021 despite only “moderate demand”.

Source: Commercial Real Estate

Fulya Altunyay/realestatecoulisse.com

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