Strong employment growth leads to prime office space shortage
By Corrine Kenny on 25 January 2018
Employment growth has resulted in positivity and activity across Australian office markets, leading to prime office vacancy in Sydney & Melbourne at its lowest in this decade.
Figures released by JLL, revealed that the national CBD vacancy rate shrank by 1.5% to 10.4% over 2017. Rents for space in Sydney and Melbourne recorded the strongest results, with Melbourne’s rate shrinking down to just 6.4%; the lowest since 2012. Sydney’s rate went down to 5.1%; the lowest in about 10 years.
JLL’s Head of Research (Australia), Andrew Ballantyne said, “Employment is the key economic variable for the office sector. Corporate Australia has become more confident about the medium-term revenue outlook and this confidence has translated into strong employment growth over 2017.”
“Employment growth is a precursor for leasing enquiry and activity. In Sydney and Melbourne, multiple industry sectors are in expansionary mode. However, leasing enquiry has improved across Adelaide, Brisbane and Perth with all three markets recording positive net absorption in 2017,” said Mr Ballantyne.