Blog - TGC News
TGCONNECT | DECEMBER 2016 + MARKET WRAP
TAKE A LOOK AT SOME OF OUR LATEST RESULTS HERE
The Sydney commercial property market ended on a high, with landlords the big winners of 2016. Buoyed by a strong NSW economy and large government infrastructure projects, the last 12 months have been extremely busy for both office leasing and sales in the CBD. The acquisition of several buildings to make way for the new Sydney Metro led to the displacement of hundreds of tenants. And the result? Vacancy rates for A and B grade space fell sharply to current lows of 3.5%, while rents jumped due to the shortage of space.
Owners are now taking advantage of limited available stock, with significantly lower incentives on offer as tenants fight it out for office space. 2017 will see even more tenants forced into the market with 5 Elizabeth Street, 50 Bridge Street and 71 Macquarie Street taken over for the Metro project. We expect the market to contract even further as rental growth continues to increase next year. If there is one piece of advice we can give to tenants looking to move next year, it’s to start the process as early as possible!
The supply and demand issues in the CBD are now forcing tenants to look at other areas, especially in the city fringe and north. And these areas are not faring much better when it comes to availability of quality stock. As with the CBD, the increased demand is leading to higher rentals, reduced leasing time frames and lower incentive levels.
Much like the residential market, both CBD and fringe commercial sales are experiencing chronically low stock levels and record prices. The demand for freehold title properties and high quality creative style strata properties continues to be extremely strong, with no signs of this diminishing soon.
At TGC, we’ve had a busy year and continue to grow the business with the addition of another city fringe sales and leasing agent to our team. We’ve placed hundreds of tenants into new spaces and have been able to secure a number of record sales prices for our clients.
VIEW OUR LATEST RESULTS HERE.