February Edition: 2023 is the year for tenants and great deals will be there for the asking
Welcome to the first 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!
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
???? Sydney CBD's vacancy rate has jumped from 10.1% in Q3 to 11.1% in Q4 and may continue to rise this year despite Agent reports remaining positive.
???? Incentives have stabilised at 35% across all grades. Still, they remain elevated, which we expect to continue longer than the major agencies anticipate as landlords compete to curb a mounting and sustained wave of vacancy.
???? Sydney currently has approximately 96,900 sqm of available sublease space. About 95% of this stock is Premium or A-grade, with more expected to hit the market this year.
Melbourne
???? Melbourne's CBD vacancy rate has increased from 12.9% to 13.8%. Despite the media predicting that vacancy rates will decline to 9% over the next few years, we believe vacancy rates will rise or remain elevated for the foreseeable future.
???? Incentives have largely stabilised across all grades. As long as high vacancy rates persist, we expect incentives to remain higher than pre covid levels.?
???? Sublease vacancy now sits at 141,900 sqm, with 90% (108,417 sqm) being A-grade space.
Brisbane
???? The average vacancy rate for Premium and B-grade buildings have both tightened while A-grade vacancy has increased, now sitting at 17.2%.
???? Gross effective rents have seen y-o-y increases, with Premium rising 8%, A-grade rising 4%, and B-grade rising 3%. Incentives remain elevated but have largely stabilised.
???? Brisbane CBD has approximately 17,700 sqm of sublease stock available, leaving sublease vacancy at its lowest point since Q2 2020
领英推荐
Being the first quarter of the year, you're probably making strategic plans for your business and kickstarting projects.?
The property market is buzzing with competitive sublease and direct leasing options. And there are no chaperones at this ball.
Learn how working with a Tenant Representative can help you navigate the crowded dance floor and unearth the best outcome for your business.
2023 will be the year for tenants.
Subleasing is driving the leaseability of direct stock down, putting pressure on total vacancy. And this year, even more companies will downsize and give back space through subleasing as the realisation sets in that working from home is here to stay.?
A landlord's only saving grace will be tricky market rent review clauses upon the exercise of lease options.
Before entering new leasing agreements, tenants must ensure that proposed commercial rent reviews are fair and commercially viable. And the first step is to understand the process and the difference between 'face rent' reviews and 'effective rent' reviews.
Get in touch with Tenant CS
The current market conditions offer some great opportunities for commercial tenants.
Landlords are competitive and flexible, and opportunistic tenants are entering renegotiations or relocating to better buildings.
Tenants can secure the best terms by identifying the weak spots in the market and creating a strategy around landlord motivators. However, navigating the tenant market alone can be challenging, even during a tenant's market. There are over 40 points to negotiate, and tenants must be across the entire market to get the best deal.
So, if you have an upcoming real estate project or lease expiry, get in touch with the team at Tenant CS today to learn how we can help you secure the best deal.
Founder & Head of Operations at PALM Projects
1 年Valuable insights, and recommendations for tenants. 2023 is absolutely the year of the tenant!