More than 105,000sq m of office space sought by tenants in 2016.
2016 has seen more than 50 per cent growth year on year in office leasing enquiry with more than 105,000sq m of new briefs in the market. Dominic Aungles, Analyst at Colliers International, said the reason for the increase is due to the large pool of lease expiry in the next 18 months.
The average size of briefs in the market was 2,470sq m, with the smallest being 80sq m and the largest 20,000sq m. The Commonwealth and ACT Government accounted for 56 per cent of this enquiry.
“Our research shows a minimum of 200,000sq m of office space expiring in 2017 and we anticipate that majority of tenants will be seeking modern A-Grade accommodation”, said Dominic.
“Attractive incentives are being offered to tenants seeking 500 to 2,000sq m due to the amount of vacant office accommodation available for lease in the market within that range. Conversely, tenants coming to the market with larger requirements are finding their options are very limited with contiguous A-Grade space in the CBD being scarce.
“The Airport has the majority of contiguous modern A-Grade office space for lease which can accommodate larger requirements coming to the market, however many tenants are seeking accommodation in the CBD and Barton.
“Tenants seeking space in these two areas are being stifled by the lack of options.”
According to Property Council of Australia January 2016 figures, there are no A-Grade vacancies in Woden and Tuggeranong. This combined with the limited options in Barton and the CBD means many tenants are finding it challenging to secure space that meets their ideal requirements.
“The CBD has 5.7 per cent of A-Grade office space vacant. This figure represents a market which is tight and marginally favourable to the landlord. The vacancy is softer in the lower grades allowing tenants to negotiate more favourable terms with incentives of 25% or higher.”
Michael Ceacis, Director of Government Services at Colliers International said there are a number of CBD buildings about to undergo significant refurbishment which will provide renewed options for contiguous space in the CBD.
“There will be about 16,000sq m of refurbished contiguous space become available in the CBD over the next 12 to 24 months which will help meet demand”, said Michael.
“Given current market dynamics we’re expecting to see tenants seeking quality office accommodation coming to the market 12 to 18 months in advance to maximise the chance of securing desirable office space in their preferred location.”