Demand for office space in the Sydney CBD, Australia’s largest office market, is expected to strengthen further over the next few months, according to Dexus' Office Demand Barometer.
Peter Studley, Dexus General Manager, Research said demand for office space in the Sydney CBD, Australia’s largest office market, is expected to strengthen further over the next few months.
“Factors pushing the Barometer higher were an improvement in the US economy, a solid uplift in ANZ job advertisements and a rise in business travel departures," Mr Studley said.
“All of these indicators are signs of rising business activity which is evidenced by an increase in leasing enquiries across our portfolio from the finance & insurance, business & property services and IT sectors.
“Demand was strongest from small companies requiring less than 500 square metres of space, which indicates the strength of demand among small to medium enterprises."
Mr Studley said withdrawals of older stock have led to tenants moving to higher quality buildings, with Prime take up more than 23,000 square metres for the quarter.
“Net absorption in the Sydney CBD rebounded to be positive in the March 2017 quarter (+2,200 square metres) and the Barometer implies another improvement next quarter," he said.
Dexus Research tracked over 100,000 square metres of leasing enquiries in the Sydney CBD over the past quarter.
Dexus’s Office Demand Barometer is a specialised model that provides an indicator for conditions which determine the level of leasing demand for Sydney CBD over the subsequent six months. The Barometer is expressed as a percentage of occupied stock.
The Barometer includes five variables which have been carefully selected based on their high correlation with Sydney CBD office demand.