An update on Sydney's Commercial Property Market from Prosper Group, leading Commercial Property Buyers Agent in Sydney and Brisbane.
Sydney Commercial Property Market:
Office:
Rents in the CBD continue to rise (by 24% in 2007) and vacancy rates fell to 3.7%, the lowest since the late 1980’s. This looks to continue over the next 3 years with net supply to be offset by net absorption (demand by tenants). This market may be more affected by a US slowdown. If the US were to slowdown as occurred in 2001, vacancies may rise to 6%.
Rents in North Sydney rose by 5% in 2007 however, this market remains oversupplied. Steady demand & low new supply should see vacancies drop to around 9% by the end of 2010. The North Sydney market may also see some over spill from CBD tenants looking to push out in search of cheaper rents and better deals. Parramatta rents increased by 11% during 2007 with potential for this to continue as vacancies fall.
Retail:
An update on Sydney's Commercial Property Market from Prosper Group, leading Commercial Property Buyers Agent in Sydney and Brisbane.
Sydney Commercial Property Market:
Office:
Rents in the CBD continue to rise (by 24% in 2007) and vacancy rates fell to 3.7%, the lowest since the late 1980’s. This looks to continue over the next 3 years with net supply to be offset by net absorption (demand by tenants). This market may be more affected by a US slowdown. If the US were to slowdown as occurred in 2001, vacancies may rise to 6%.
Rents in North Sydney rose by 5% in 2007 however, this market remains oversupplied. Steady demand & low new supply should see vacancies drop to around 9% by the end of 2010. The North Sydney market may also see some over spill from CBD tenants looking to push out in search of cheaper rents and better deals. Parramatta rents increased by 11% during 2007 with potential for this to continue as vacancies fall.
Retail:
NSW Retail spending rose by 6.3% in 2007, the highest level since 2002 as job growth, rising population growth & good economic conditions lifted household income. Continued job growth (at least in the first half of 2008) should drive turnover at a faster rate in 2008, before slowing in the subsequent two years.
NSW and Sydney are more open to any slowdown in the US economy. Although expectations are that any impact will be minor. Low levels of new supply will help the market maintain some stability should economic growth or retail spending growth not be as high as expected. Inflation level rental growth is expected over the next three years.
Industrial:
NSW has been one of the weakest economies since the end of the 2000 Olympics. Slow growth has been saved by high imports and storage requirements (warehousing), fuelled by steady growth in private consumption.
Demand for Industrial property should continue to remain robust at least to 2010.
41% of Sydney’s future Industrial supply is in the outer North West. This high level of supply will need a continued strong economy to ensure that some of the more speculative investment is leased up.
Rental growth averaged 15% in 2006 and 4.3% in 2007. Rental growth should be around CPI for 2008 given the high levels of supply, albeit demand is also strong at present.
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