Record low vacancy of office towers in Sydney and Melbourne
August 21, 2019 | Uncategorised
According to the latest Real Estate Investment Trust results, the chief executive of the Dexus, Darren Steinbergsays his group is well positioned to handle the economic uncertainty and has forecast another 5 per cent growth in distributions for current financial year. He told The Financial Review earlier this month that even with all this economic around them demand to date has been very solid.
The vacancy of office towers in Melbourne and Sydneyis at near record lows, incentives have fallen, rents have jumped, and, on the back of falling interest rates, values have soared.
On average the new rent in the Sydney CBD was 24 per cent above the outgoing figure struck several years before.
The strong returns from the office towers, have been a key feature of the latest REIT reports, particularly when placed in stark contrast to the under-pressure performance of the shopping centres.
GPT Group reported “supportive conditions” in Sydney and Melbourne with like-for-like income growth from its office towers of 6.5 per cent – even allowing for lost income after the sale of Sydney’s MLC Centre – compared with just 1.4 per cent from the shopping centres.
The latest vacancy numbers from the Property Council of Australia are tight – just 4.1 per cent in Sydney and 3.8 per cent in Melbourne.
Colliers International’s forward-looking Office Demand Index is more upbeat, noting a spike of national office leasing enquiry, up 8 per cent, in the June quarter, helped by the result of the federal election. Only Melbourne and Adelaide missed the upturn.
Source: Australian Financial Review