Office Leasing Insights, Australia Q2 2014 update

Office Leasing Insights, Australia

What happened in Q2 ?

The national CBD office market vacancy rate

increased to 12.2%

However, lead indicators for

office sector demand have improved over the first half of 2014

Business confidence Job advertisements Equity market

Office Leasing Insights, Australia

Office Leasing Insights, Australia

CBD Office Vacancy Rates Q2 2014

14.81%

16.51%

13.20%

11.13%

12.69%

9.94%

Adelaide Brisbane Canberra Melbourne Perth Sydney

Office Leasing Insights, Australia

CBD Office markets net absorption 2013/14 Financial Year

The fragmented nature of CBD office markets is proving

to be a tale of

two tiers

Office Leasing Insights, Australia

Sydney and Melbourne both recorded positive

net absorption

There have been significant tenant contractions in secondary stock

By contrast, Brisbane and Perth both recorded negative

net absorption

A tale of two tiers

Businesses are using favourable conditions to move into CBD markets

Office Leasing Insights, Australia

Looking forward

Professional services and technology-related firms are

Leasing activity is Over next 3 years, up to In particular assets with

over the 2014/15 financial year

expected to improve showing signs

of expansion could potentially be withdrawn from national

CBD office markets.

5% of office stock potential.

residential conversion

Office Leasing Insights, Australia

Sydney

“Business conditions are improving within the finance and insurance sectors on the back of broader economic positivity across New South Wales.” Tim O’Connor Head of Office Leasing NSW & Australia

VACANCY RATE

Decreased to 9.94%

QUARTERLY NET ABSORPTION

Positive: 21,818sqm

SYDNEY

Office Leasing Insights, Australia

MELBOURNE

Melbourne

“Leasing demand has improved with many city fringe tenants prepared to seriously assess and ultimately relocate to the CBD” Stuart Colquhoun Head of Office Leasing, VIC

VACANCY RATE

Increased to 11.1%

QUARTERLY NET ABSORPTION

Positive: 11,100sqm

Office Leasing Insights, Australia

BRISBANE

Brisbane

“The road to a stable, balanced vacancy will be reliant on a significant amount of secondary stock being withdrawn between now and 2016.” Mark Curtain Head of Office Leasing, QLD

VACANCY RATE

Increased to 16.5%

QUARTERLY NET ABSORPTION

Negative: 21,200sqm

Office Leasing Insights, Australia

ADELAIDE

Adelaide

“Lease negotiations are still challenging, but it now seems the biggest hurdle to overcome is the abundance of options available to tenants rather than a reluctance to relocate.” Tom Budarick Head of Office Leasing, SA

VACANCY RATE

Increased to 14.81%

QUARTERLY NET ABSORPTION

Negative: 3,986sqm

Office Leasing Insights, Australia

CANBERRA

Canberra

“Private sector tenants have been the main driver of leasing activity in 2014, as outsourcing opportunities within the Government start to increase.” Andrew Balzanelli Managing Director, ACT

VACANCY RATE

Increased to 13.2%

QUARTERLY NET ABSORPTION

Negative: 26,559sqm

Office Leasing Insights, Australia

PERTH

Perth

“Rents will remain under downward pressure over the second half of 2014, with incentives facing upward pressure.” Nick Van Helden Head of Office Leasing, WA

VACANCY RATE

Increased to 12.7%

QUARTERLY NET ABSORPTION

Negative: 13,800sqm

Office Leasing Insights, Australia

Want to know more? For a full national update visit www.jll.com.au/officemarkets