Near City vacancy levels are forecast to fall to a historic low of 2.1% in July 2007 before reverting back to 6.2% by July 2008. Results from our forecast then see vacancy rates peak at 8.1% at July 2009 as a result of over 141,000 sq m added to the market in the previous two years. The vacancy level is expected to soften gradually to 5.9% in July 2011 as absorption of over 20,000 sq m per annum stabilizes the impact of the sizeable additions during 2008 and 2009. Verify that the authorized conveyancer named by you makes legitimate inquiry of the property and guarantee that all the assessment and other lawful provisions are satisfied by the vender.
Net face rents in the Near City have seen a considerable upswing in growth over the last two years after a period of negative growth during 2003. The peak in rental growth was observed in December 2005 at 8.64% while the growth rate is currently at 8.03% and rental levels achieving on average $310/sq m. After a historical growth average of 3.61% over the last five years, Landmark White anticipates an average growth rate of 3.53% to 2011 with the trend of growth to remain more stable through the forecast period.
Incentive levels are currently between 5% and 10% for the Near City however there are instances of no incentives provided especially for new and well located office space. The problem and worse make it easier for social landlords to evict anti-social tenants, hence shifting the problem onto the private rented sector.
It is imperative also that Government recognizes that higher standards require funding. Simply regulating, without making grants available for improvements, or encouraging investment, will only lead to less housing stock. Some of the more significant sales recently has been the purchase of 121 Wharf Street, Spring Hill by GE Real Estate and the Seymour Group and Westpac joint venture acquisition of an approximately 2 hectare site at New stead. Before selecting a master verifies that he/she is enrolled under the Law society or the committees of authorized conveyancers act.
“Yields in the Near City market are in a range of between 7.00% and 8.50% as ongoing demand from institutional investors and now a lesser extent developers continue to compress this range.” It can be anticipated that average yields will move towards 7.50% whilst there are strong fundamentals in the office market and overall economy.
“Affordability levels hit long term lows after the peak of the market due to increased interest rates in 2003 and more recently in November 2006.”