Small businesses drive office leasing deals 21 percent on prior year: Colliers International

Small businesses drive office leasing deals 21 percent on prior year: Colliers International
Small businesses drive office leasing deals 21 percent on prior year: Colliers International

The amount of office space leased across major Australian markets increased 21 percent year to date till September, helped by strong demand from small businesses — mainly the IT sector, according to real estate firm Colliers International.

According to Colliers International’s latest Office Demand Index, 448,163 sqm of office space was leased nationally as of September YTD 2016. 

A huge majority, 85 percent, of these leasing deals involved businesses looking for less than 1,000 sqm of office space. 

“Year to date, the Sydney and Melbourne markets have seen heightened activity for small businesses,” said Simon Hunt, managing director of office leasing, Colliers International. 

“A growing number of small businesses are looking to establish their headquarters in Australia’s two major markets, with the IT industry leading the way.”

A significant proportion of leasing deals concluded to date in 2016 involved businesses within the IT sector, with this group accounting for the third greatest amount of area transacted, following the always-prevalent state government and legal sectors. 

Colliers International’s Office Demand Index recorded 465,162 sqm of demand in Q3 2016, a 13 percent decrease compared to Q3 2015 with 79 percent of the total demand under 1,000 sqm. 

The number of enquiries recorded year to date, however, rose by 8 eprcent on the previous year, with the amount of space enquired for increasing by 3 percent. 

Sydney recorded 210,407 sqm of demand, up 22 percent on Q3 2015, while Brisbane recorded 31,380 sqm of demand – a 31 percent increase from Q3 2016 to Q3 2015. In Canberra, demand rose 27 percent year on year to 14,260 sqm.

Melbourne saw a 38 percent decrease in enquiry, from 239,594 sqm in Q3 2015 to 149,320 sqm in Q3 2016. 

“Even though Melbourne recorded a drop in demand for Q3 2016, the amount recorded still  surpassed that seen in Q1 2016 and Q4 2015,” Hunt said. 

In Adelaide, enquiry fell 33 percent from 50,704 sqm in Q3 2015 to Q3 2016 and Perth saw a decrease of 53% from 35,595 sqm of enquiry in Q3 2015 to 16,663 sqm in Q3 2016.

Tags: 
Office Space Commercial Market

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