Sydney office rents to rise: BIS Shrapnel

Sydney office rents to rise: BIS Shrapnel
Sydney office rents to rise: BIS Shrapnel

Sydney office rents will surge between now and the end of 2018 as market power shifts back to landlords, according to BIS Shrapnel.

The forecasters expect net face rents to rise by about 30 per cent over the next three years

Agents are starting to see face rents rise and incentives contract.

BIS Shrapnel expects prime net face rents to increase from an average of $890 per square metre to $1200 per sq m by December 2018.

On an effective basis, with incentives forecast to fall from 28 per cent to 10 per cent, rents will almost double from $570 to $1100 per sq m.

"Tenants have become used to receiving large leasing incentives in the Sydney CBD over the last six to seven years. But the ground is starting to shift." said Lee Walker, Senior Project Manager at BIS Shrapnel.

The key driver will be the vacancy rate as BIS Shrapnel forecasts this to fall from a current seven-year low of 6.3 per cent to just 3 per cent by 2018.

"After years of delaying leasing decisions, businesses are looking to expand in Sydney, buoyed by the strength of the NSW economy," he said.

Last year, CBD office net absorption reached a 10 year high of over 150,000 square metres. 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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