Over the past 12-24 months it has been a tenant's leasing market in most of the prime commercial office parts in Sydney. The incentives offered by commercial landlords have been generous (in the range of 25-40% of lease value) and this equates to some of the highest leasing incentives we have seen in a long time.
The argument for tenants to relocate to new premises has been strong based due to incentives being offered and in many cases it has allowed small and large corporate tenants the opportunity to consolidate multiple locations, rationalise office space and provide a better working enironment for their staff. SO, is the dream coming to an end as we see vacancy levels start to drop in key markets such as Macquarie Park, Chatswood, North Ryde, Sydney CBD and Parramatta?
In addition, will the increased demand caused by the rezoning of commercial sites and the fast tracking urban activation precints also add pressure to commercial office stock levels by further reducing commercial office stock?
Consider markets such as Epping, part of Macquarie Park and the Sydney CBD fringe where commercial office sites are being rezoned and redeveloped into medium and high density residential towers.
Does this all point to a tightening of the Sydney's key office markets, reduction in leasing incentives and in-turn growth in rental levels? For expert advice on where your rents are heading contact RHCOP for the latest in office market rents - 02 9739 9788