December Edition: 2023 Office Market Update & Happy Holidays From Tenant CS
Welcome to the last edition of Tenant CS's Monthly Roundup for 2023, where we share company news, articles you may have missed and helpful tips for commercial tenants.
Let's get started...
Sydney, Melbourne and Brisbane CBD Leasing Markets | Office Snapshot
Take a read of our latest CBD office leasing snapshot through a unique tenant-centric lens. Here's a quick snapshot of the current state of play in Sydney, Melbourne and Brisbane:
Sydney
???? The PCA is reporting that Sydney's CBD vacancy rate is sitting at 11.5%.?However, we believe vacancy figures to be much higher, especially considering the number of subleases available.
???? In a bid to maintain property values, gross Face and Effective rents have continued to increase quarter-on-quarter, with Premium face rent rising from $1,690 to $1,700, A-grade from $1,380 to $1,390 and B-grade from $1,100 to $1,130. However, high incentives that average between 30-39% offset these increases.
???? The Sydney CBD has seen an uptick in sublease space, with sublease availability as a percentage of total stock sitting at 2.7% (approx. 139,000 sqm), up from 2.4% in Q2 2023.
Melbourne
???? Melbourne CBD’s overall vacancy rate remains elevated, increasing from 12.9% in Q3 2022 to 15% in Q3 2023 as tenants move up the quality curve.
???? Face rents remain elevated in an attempt to maintain declining property values. However, they're being capped by higher incentives, which have increased year on year, with Premium rising from 38% to 41.5% and A & B grades from 40% to 42%.
???? In June, Melbourne CBD's sublease availability was reported at 2.2% of total stock. Though new numbers have not yet been released, many larger companies are still looking to sublease quality excess space at relatively low rents and on long lease terms.
Brisbane
???? According to the PCA, Brisbane's overall CBD vacancy rate decreased from 12.9% to 11.6% in 2023 due to strong demand and limited new supply.
???? Gross Face and Effective Rents have increased Q-o-Q. Significant movement can be seen for Premium and A-Grade assets, where Premium Gross Effective Rent increased from $605 to $635 and $445 to $465, respectively.
???? Though sublease space in Brisbane remains the lowest in the country, over the last year, the volume has ticked up by +28,821sqm, with 324 Queen Street contributing 3,769sqm, 545 Queen Street 2,020sqm and 111 Eagle Street contributing 2,968qm.
Get more market insights:?https://www.tenantcs.com/blog/australian-leasing-market-snapshot
The Great Return: Tips For Getting Employees Back To The Office
The Property Council of Australia tracked occupancy levels until February of this year.
While offices have gradually become busier, occupancy is still below pre-Covid levels, and a noticeable "mismatch" is emerging between employee and employer expectations.
领英推荐
Solving the return-to-office dilemma is not easy, but if you're looking for ways to entice staff back to the office, try one or a combination of these tips: https://www.tenantcs.com/blog/returning-to-work-after-covid
Options to Renew: How They Work & Why We Often Advise Against Exercising Them?
Understanding how and when to exercise an option makes all the difference. Let’s dive into the details and learn why we generally advise our clients against exercising them in a tenant's market (like we're in now).
The Pros and Cons of Commercial Subleasing
Subletting all or part of your premises to another company can aid cash flow and reduce rental payments. But it's important to understand your rights and responsibilities,?both as the Sublessee and the Sublessor.
Office Tenants Wrapped 2023
From the boardroom to the breakroom, which track set the tone for your office move this year? ??
Happy Holidays from the team at Tenant CS!
As we wrap up another incredible year, we wanted to take a moment to thank our phenomenal partners and clients. Your support, collaboration, and trust have been the secret sauce behind our success in 2023.
Wishing you all a joyful holiday season, a Happy New Year, and a well-deserved break ??
Please note that our office will be closed from 22 December and will reopen on 8 January.
See you in 2024!
Cheers,
The Tenant CS team ????