Melbourne Australia’s office rent boomtown
Office rents rose at a faster pace in Melbourne than Sydney during the June quarter, while a number of large leases are set to be struck in Sydney during the next three months.
Sydney recorded 0.4% growth in prime gross effective rents in the June quarter, according to research by Cushman & Wakefield.
Growth was faster in Melbourne at 6.2%, with limited new supply and moderate tenant demand contributing to conditions that favoured landlords in the Melbourne CBD, the research found.
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Both major cities are forecast to see little new office space coming on line in the next couple of years, which — in combination with strong economic performance — has been supporting rents and encouraging some tenants to consider city fringe locations.
The research found several tenants in Melbourne are still looking for 10,000sqm-plus office locations, suggesting strong leasing demand was likely in the third quarter. This is set to push the vacancy rate lower.
In Sydney, transactions over 4000sqm were limited in the second quarter but several tenants with larger requirements are close to agreement, meaning the third quarter could see a rise in larger deals.
Elsewhere, Brisbane rents rose 1.9% as tenants continued to move to better quality office accommodation.
In Canberra, rents rose 5.2% amid fast economic growth.
This article originally appeared on www.theaustralian.com.au/property.
