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Suburban Offices Set to Surge

Over the past few weeks, you have been reading articles about the various Office markets around Australia.

As such, you would now be aware of how each capital City compares, in relation to its … Vacancy rates … Rental levels … and expected Capital growth.

 You can expect definite Rental Growth in the city fringe.However, most of that commentary has been focused upon CBD Offices. And as a result, people have been enquiring about just how the Suburban Office markets are also likely to perform, over the next few years.

Clearly, a rent differential exists between the City and Suburban Office markets. And obviously, that rental gap will also vary, as you move around Australia. [Read more…]

“Where You Live Should NOT
Dictate Where You Actually Invest!”

Always consider the emerging trendsWherever you live, you tend to believe (and will happily tell people) that it is undoubtedly the best place to live.

Really, it’s just human nature.

But when it comes to investing your hard-earned dollars into Commercial property … your decisions should be governed by something more than a warm and fuzzy feeling.

For the past four or five years, Victoria has led the nation in economic growth; and it is one of the few enjoying a net growth in migration from other states.

Employment Growth shows some interesting trendsFurthermore, the latest ABS figures now confirm Victoria’s continued growth and job creation — leading all-comers over the past 12 months.

And you’ll also notice most of the various service sectors are currently outstripping the mining sector, as far as employment numbers are concerned. [Read more…]

Office Activity: CBD vs Suburban

Commercial Buildings
In several recent articles, we discussed the growing health of the CBD Office markets around Australia.

Melbourne still leads the other capital cities with a CBD vacancy rate of 6.2% at the end of March.

And according to Savills’ latest Office Spotlight, the number of whole floors within the city of Melbourne has fallen by some 35% — from 60 to 39 available floors, as at January 2011.

It seems that CBD tenants are scrambling to lock in larger areas, to allow for growth and avoid the expected huge rent increases over the next 5 to 7 years.

Office VacanciesAs a result, many mid-sized tenants are being pushed out into suburban locations. In turn, this is causing these vacancies to fall and rentals to rise.

As such, Melbourne’s suburban vacancy rate (at 5.8%) is now below that for the CBD.

And Colliers Research believes this could fall below 4% over the next 12 months — through a shortage of new space coming onto the market.

Likewise, Sydney and Brisbane have seen their suburban vacancy rates also decline. And net prime face rents in North Sydney are now up over $600 per sqm.

It would appear only Adelaide’s suburban Office leasing market has remained soft — despite several major sales putting some downward pressure on yields.

Bottom Line: Fundamentally, all the signs are there for continued growth in Commercial rentals and capital values over the next 5 to 7 years — despite the global backdrop creating hesitation for some investors, who are not part of the “Inner Circle”!


“It’s Now Official: Offices are the Go!”


Over the past month or so, I’ve been making certain predictions about the Office markets around Australia.

But in a recent survey, the Property Council of Australia (PCA) now makes all of that official: Office vacancy levels have fallen to 9.5% overall — down from 10% in mid-last year. And this has been driven by strong growth in the mining and financial sectors. [Read more…]

CBD Offices Can Expect Solid Growth

What a difference a year can make to Office markets around Australia.

Twelve months ago, the rest of the world was anticipating double-dip recession.

And white-collar employment was looking rather fragile here in Australia — particularly for Sydney, with its high exposure to the finance industry.

Even so, Melbourne’s office leasing market remained strong throughout all of last year.
[Read more…]

A Strong Finish to 2009

By early December 2009, sales of Commercial property in Melbourne’s CBD had almost reached $1 billion — according to a report prepared by Jones Lang LaSalle.

Apparently, Melbourne office sales (for buildings over $10 million) totalled around $998 million — while in Sydney, it had reached $444 million.

Sales may well have topped the $1 billion mark by the end of December, because this strong activity resulted from private investors — particularly, in the region of $50 million.

And following another recent survey, more than half of Colliers’ client said they were expecting to see further growth in 2010.

In the suburbs, strata Office demand remained strong — with smaller owner-occupiers seeking Offices close to shops and main arterial roads.

State of the Commercial Market?

CBD Office Vacancies

CBD Office Vacancies


As you would expect, the financial turmoil worldwide has had a significant effect on most property markets. However, the effect has not been the same across the board.

The current state of the various CBD office markets is probably your best barometer of future activity for two reasons. First, the Property Council of Australia (PCA) conducts six-monthly surveys to establish the CBD vacancy rates right around Australia.
[Read more…]

CBD Office Shortage Looming for Melbourne

h3. And Rentals are Set to Rise …

The recent boom period saw prime Office rentals in Brisbane, Sydney and Perth hit the $1,000 per sq metre mark. However, they have fallen dramatically from that peak, since mid-2008

Meanwhile, Melbourne has remained steady at around $750 per sq metre — mainly because most of its new development has occurred in pre-committed medium-rise buildings, within the Docklands precinct.
[Read more…]

CBD Office Markets

CBD Office Sales

CBD Office Sales


As a result of the global financial crisis … sales of Melbourne CBD Offices fell in 2008 (to $425.2m) from the level achieved in 2007 (of $850.9m) — according to research released by CBRE.

Institutional buyers and REITs have virtually withdrawn from the market … leaving private syndicates, wealthy families and overseas buyers to transact most of the deals.
[Read more…]