The response from owners of secondary space to growing segmentation in the market is a key trend to emerge in this cycle, Mr McCarthy pointed out. Owners in Sydney and Melbourne CBDs are withdrawing space at record levels. In Sydney, where 172,800 sq.m. of space was withdrawn last year, most owners are opting to refurbish. More than 50 per cent of withdrawn space will come back as higher quality accommodation, 28 per cent is being converted to other uses such as residential apartments and most of the balance is to be demolished.
In Melbourne, 159,500 sq.m. m of office space was removed from the market last year – about 73 per cent will be converted to residential, tourism and educational accommodation and the balance will be refurbished for offices. Mr McCarthy noted that despite the squeeze on Premium space, Sydney CBD is still the only Australian market to show significant development activity. We are specialist residential and commercial property auctioneers as well as conveyancing brisbane with an unrivalled depth of experience and market knowledge. Over the next four years, the Property Council projects about 825,000 sq.m. of new and refurbished office space to be supplied to CBD markets around the country – but the bulk – 63 per cent or 517,000 sq.m. – will be in the Sydney CBD.
“The relative lack of development activity in other markets isn’t the result of there being no plans – a number of projects across the country remain mooted. Investors are simply waiting for more positive signs of rental growth before pressing the button”. Perth was the only CBD office market to record an increase in vacancies in the past six months up from 12.3 per cent to 12.6 per cent. Mr McCarthy said “this was the first increase in Perth CBD’s total vacancies in the past five years”.
As the market begins to stabilize by year-end 2003, the Northern Arc suburban office markets will lead the way with projects in the Easton, Polaris, Tuttle Crossing and New Albany areas. There will be more supply than demand with a gradual increase in speculative construction during the fourth quarter of 2003.
This trend is starting to plateau and will gradually cease to exist through the next 12 months.
Current Columbus businesses will be expanding, and new businesses will come to the market taking advantage of the various concessions. The Columbus market will continue to survive and provide an excellent opportunity for corporate growth. Franklin County also has been listed as the top producer in Ohio for new business starts since 1996.
“The East and Inner Regions represent the smallest proportion of development, given the limited developable industrial land available and cost”, “regions particularly to the West are now far more desirable given their connections to infrastructure.” “This is evidenced by the large early feasibility supply pipeline for the Western Region; currently 300,000 sq m is being planned in Ravenhall.”
“The Riding Boundary Industrial Estate is going through early planning for development by Leighton,” it is likely this supply will be staged or completed upon pre-commitment. The Melbourne industrial rental market has been improving over the last twelve months with the current average for the metropolitan area reaching $86/sq m net face in Landmark White’s December quarter analysis. The most notable increases in prime net face rents came in the East up 5.1% in the last year to $82/sq m, while prime rents in the West continue to steadily rise with average rents up to $71/sq m representing a 3.7% growth. The South east saw the lowest growth of only 1.9%, while the North continued its consistent growth of 1.3% to $77/sq m. It serves to grasp the sort of work a conveyancing authority does before you contract on.
“The future of the rental market is dependent on supply levels; future rental growth is only feasible given supply additions are completed in line with demand.” With over 1 million sq m of new space which can possibly enter the market over the next 18 – 24 months, there is growing importance on continuing “demand led” completions rather than high level speculative development. Enact Settlement Agents Perth have that skills for making the conveyancing process done effectively.
“Rents particularly in the West and North are unlikely to see great increase over the next year given their good growth over the past two years.” “Given rental growth in this market, industrial property continued to be sought as an attractive yielding investment with increased activity by the institutional sector, particularly and Listed Property Trusts.” In the first 11 months of the year, Landmark White have monitored close to $532 million in sales in 81 transactions, investment so far this year is well below 2005 results of $676 million in 130 sales.
Despite the last month push for completion of sales, given the lack of quality investment stock available to the market; it is unlikely that turnover will meet this level. The value of transactions in the South and Western Regions at 38.7% and 32.4% respectively, well ahead of the previous year result of 32.2% and 16.4%. These regions saw the greatest concentration of institutional investment by both Wholesale Funds and Trusts.
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.”
Further ‘devil in the detail’ will be the enforcement regime the Government is proposing. If it is too strong it will risk further alienating responsible landlords, but if it is too weak it will put a lot of good landlords to extra work for no gain. “East Asian societies share a consistent view of how their social and economic wellbeing should be run. The essence of this is that governments should do little to temper the hazards of life, particularly the consequences of technological and economic change. Governments spend little on social welfare and individual freedom is reduced. This reinforces strong social institutions like the family, which remains essential to survival.
All members with leasehold property interests in the ACT are urged , as a matter of urgency, to contact Assembly members expressing alarm at the impact of these proposals and their detrimental effect on investment in the Territory. Vacancy rates across Australian CBD office markets fell to 10.4 per cent from 12.4 per cent in the twelve months to January 1998, Mr John McCarthy, National President of the Property Council of Australia, said there is now clear evidence that the office market recovery was moving up a gear. Melbourne CBD was the office hot spot for 1997, said Mr McCarthy.
The Melbourne CBD total vacancy factor fell from 19.2 per cent to 14.0 per cent in the past year. Sydney CBD continues to lead the markets with the total vacancy factor now 5.4 per cent, down from 7.5 per cent at January 1997. However, the most interesting trend to emerge from the Property Council’s audit of Australian office markets was the fall in the prime office vacancy levels, said Mr McCarthy.
Premium vacancies across Australia are now at 5.2 per cent – down from 7.7 per cent twelve months ago. “In most markets, vacant space in better quality stock is becoming very tight,” said Mr McCarthy. “These results back anecdotal evidence that it is extremely difficult to lease significant areas of continuous space in Premium stock. Conveyancing specialists are the person with depth knowledge about conveyancing process. “There is a large variation in vacancy factors between the various quality grades of stock and this points to an increasingly segmented office market,” he said. Sydney CBD is the tightest market. The Premium total vacancy factor dropped from 2.4 per cent to 1.9 per cent in the past year. But the most striking improvement came from Adelaide Core where Premium office buildings recorded a 7.1 percentage point fall in vacancies during the past year.
In other office markets, a similar pattern is emerging in Premium office space: Brisbane – 6.3 per cent (down from 10.2 per cent 12 months ago); Adelaide 4.3 per cent (11.4 per cent); Melbourne 6.8 per cent ( 8.5 per cent); Perth 4.1 per cent (7.2 per cent). “The flight to quality reflects the increasing demand from businesses for better quality office accommodation,” said Mr McCarthy. “As we move into the next millennium, businesses are demanding buildings that offer superior technology, efficient floor-plates and high quality building services.