Latest News

Sydney’s CBD office market will be in a ‘unique cycle over 2017 and 2018’ and stock withdrawals will be higher than the number of completions.

This is according to JLL's Head of Office Leasing – NSW, Daniel Kernaghan, who also said the size of the market will contract.

He added: “Diminishing options for contiguous space have pushed incentives to the lowest level since 2011 and competition for space will push them lower over 2017 and 2018.”

Last year in Sydney was the strongest performing CBD market nationwide with office rents rising 17.6%. JLL research says there is the potential for a strong rental growth in 2017-18 as well in Sydney.

Vacancy also increased marginally in the fourth quarter of 2016 to 7.7% after International Towers Sydney reached practical completion.

Mr Kernaghan explained: "The performance of the Sydney CBD office market should be put in context – 2016 was largest year for completions since 1992 and it had no impact on the headline vacancy rate over the year.

"Competition for space was generated by organic growth across a range of industry sectors and the displacement of tenants from Sydney Metro and residential conversion.

“The next wave of displacement will be generated by tenants vacating 50 Bridge Street."

Since the start of the rental upturn in the fourth quarter of 2013, the Sydney CBD has recorded a 32.5% growth in prime gross effective rents.