Cushman & Wakefield has just released their Q2 office research for Melbourne, Sydney and Brisbane CBD and a separate look at fringe markets, showing that Melbourne has seen the strongest increase in rents in the past year, rising 13% to $580/sqm. Highlights below and chart tracking CBD markets attached.
It’s also the first time they have focused on the metro/fringe markets with all reports attached, including major deal listings.
- Prime gross effective rents are at $580/sqm at the end of Q2 – a 13.3% year-on-year increase. Net incentives steadied at 28%.
- Cushman forecasts indicate that Melbourne CBD vacancy could sink to below 4% in the second half of 2018.
- Southbank remains one of Melbourne’s tightest markets with rents rising 15% YoY to $450
- After strong growth in the first quarter, Sydney gross effective rents paused for breath remaining stable at $955/sqm and B-grade at $755/sqm
- Parramatta cements is place as Sydney’s second CBD with rents breaking $500/sqm in Q2
- Tech firms are targeting fringe markets including Surry Hills and Darlinghurst, with Grade A net face rents averaging $675/sqm per annum, and Pyrmont at $655/sqm – 30% less than the CBD.
- Brisbane Q2 gross effective rents are at $448 in Q2
- Announcements concerning nearly 25,000 sqm of space were made in Q2
- Despite the high level of vacancy overall, larger tenants of over 2,500 square metres (sqm) are struggling to find grade-A space
- Limited supply under construction, stock withdrawal and improving tenant demand are forecast to provide downward pressure on vacancy over the next 18 months
Read and download the full research here.