Melb office tops Q2 rent growth – Parramatta breaks $500/sqm

Q2 2018 rental charts East Coast

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.

Highlights:

Melbourne CBD/fringe

  • 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

Sydney CBD/metro

  • 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 CBD/fringe

  • 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.

By: JAGONAL