The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
print
Print
OfficeMon 27 Nov 17

Sydney and Melbourne Lead the World in Office Rental Growth

sydneyhome

Sydney and Melbourne have again taken out the top two spots globally for office rental performance, leading the list for annual prime office rental growth in the 2017 third quarter.

JLL’s Q3 Global Office Index shows Sydney way out in front globally in the number one spot for annual growth over the last year. Sydney recorded 30.1 per cent annual growth in prime rents. Melbourne recorded 17.3 per cent year-on-year growth for the same period, pushing it to number two global.

US cities came in next, with San Francisco Peninsula in third at 12.9 per cent annual rental growth, New Jersey at 12.2 per cent and Portland in fifth spot at 10.4 per cent.

“Sydney has consistently featured in the Top 10 Global performers rankings for the past five years and Melbourne for the past two years," JLL Australia's head of office leasing Tim O’Connor said.

“Two years ago, Sydney ranked number one, while Melbourne was ranked fifth. While the Sydney story has continued on the back of centralisation, stock withdrawals and growth from the technology sector in particular, Melbourne is now following hot on the heels.

“The sharp reduction in vacancy that precipitated the upward pressure in Sydney and Melbourne rents has been amplified by the lack of available new supply coming on line in the short term. The number of options for larger space users in existing stock now means demand will be expressed through additional pre-commitment activity,” O’Connor said.

[Related reading: Melbourne Office Market a National Standout]

The index shows that rental growth for prime offices across the 125 major markets covered by the JLL Global Office Index continued to pick up pace in Q3 2017, rising by 2.7 per cent year-on-year.

This was significantly above the 10-year average growth of 1.6 per cent.

Momentum is expected to continue with above-average increases in 2018, with a projected uplift of 3 per cent for the full year 2017 and 2.3 per cent globally next year.

"Sydney and Melbourne effective rental growth was in double digit territory over 2016 and 2017. We expect that effective rental growth will ease back from this rate in 2018," JLL Australia's head of research Andrew Ballantyne said.

“Nevertheless, Sydney and Melbourne effective rental growth is projected to remain above 7 per cent in 2018 with the potential to be even higher if the competition for space exerts further downward pressure on leasing incentives."



JLL's November 2017, Global Market Perspective Office Index can be found here.

OfficeAustraliaInternationalMelbourneSector
ADVERTISEMENT
TOP STORIES
Parallel Workshops Stockdale Housing PBSA project
Exclusive

Suburban Success Story Turns PBSA Thinking on its Head

Leon Della Bosca
7 Min
Exclusive

Interstate Developers Find Lots to Love in ‘Progressive, Affordable’ SA

Taryn Paris
5 Min
Bates Smart Richmond Sportslink HERO
Exclusive

BtR Focus Drives Bates Smart’s Richmond Sportslink Concept

Leon Della Bosca
6 Min
Exclusive

Carparking Correlation: How Parking Fees Provide Office Sector Health Check

Taryn Paris
6 Min
Molti chief Ben Teague out front of 32 Mercer Road Aramadale (rendering)
Exclusive

Buy to the Sound of Cannons: Molti’s Counter-Cyclical Move to Melbourne

Leon Della Bosca
5 Min
View All >
Kangaroo Point Aria Canopy House Revised DA Approval hero
Development

Aria’s Revised Tower Greenlit for Inner-City Kangaroo Point

Phil Bartsch
Warren and Mahoney's rendering of Leftfield's project at 691-693 Burke Road, in Melbourne's Camberwell.
Residential

Leftfield Lifts Cover on 14-Storey Scheme at Camberwell

Marisa Wikramanayake
Parallel Workshops Stockdale Housing PBSA project
Exclusive

Suburban Success Story Turns PBSA Thinking on its Head

Leon Della Bosca
Top marks for developer’s move from ‘crammed’ city towers to spacious suburban student accommodation…
LATEST
Kangaroo Point Aria Canopy House Revised DA Approval hero
Development

Aria’s Revised Tower Greenlit for Inner-City Kangaroo Point

Phil Bartsch
3 Min
Warren and Mahoney's rendering of Leftfield's project at 691-693 Burke Road, in Melbourne's Camberwell.
Residential

Leftfield Lifts Cover on 14-Storey Scheme at Camberwell

Marisa Wikramanayake
3 Min
Parallel Workshops Stockdale Housing PBSA project
Exclusive

Suburban Success Story Turns PBSA Thinking on its Head

Leon Della Bosca
7 Min
Hotel

Perth Hotel New Role Revealed After $105m Sale

Lindsay Saunders
2 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/sydney-melbourne-office-rents-jll