Colliers International releases Q2 2016 Office Demand Index.
A 22% surge in demand for office space across major Australian markets has been recorded off the back of increased activity among small businesses, according to new data from Colliers International.
According to Colliers International’s latest Office Demand Index, a total of 621,156sqm of demand was recorded in Q2 2016 – a 22% increase from Q1 2016.
Enquiry by small businesses looking for sub-1,000sqm of office space rose 85% in Q2 2016 compared to Q1 2016. This sector also recorded a 51% year-on-year increase in enquiry, from Q2 2015 to Q2 2016.
“In the current market, small businesses are driving a significant amount of enquiry for office space nationally, compared to this time last year,” Simon Hunt, Colliers International Managing Director of Office Leasing, said. “Small businesses are also catering for more than 80% of the number of deals that have been transacted year-to-date.”
“Small businesses are currently most active in the Sydney market, where we have seen almost triple the amount of space enquired for in the second quarter of 2016 compared to the first quarter.
“The amount of space enquired for in the Melbourne market also more than doubled in Q2 2016, compared to Q1 2016.”
Small businesses were also increasing their enquiry in Brisbane and Adelaide, recording quarterly rises of 25% and 15% respectively.
Colliers International’s Office Demand Index found activity in larger markets was also being driven by mid-sized businesses (1,000-2,999sqm), which enquired for 18% more space in Q2 2016 than in Q1 2016.
“This quarter, we have seen more small businesses enquire for office space than ever previously recorded, however this doesn’t mean large business activity has stopped,” Mr Hunt said.
“The second quarter of 2016 has seen large businesses increase their enquiry for 3,000sqm-plus space by 23%, compared to the same period last year.
“While small businesses are currently the most active in terms of demand and transactions, we expect to see larger businesses increasing their transactionaly activity into the second half of this year.”
Nationally, Colliers International data found the amount of space leased at June YTD 2016 was up by almost 40,000sqm, a 17% increase year-on-year compared to the same time last year.
The Melbourne market had seen the greatest number of 3,000sqm-plus deals negotiated. In the Sydney market, the greatest number of small business moves were recorded.
The number of businesses moving into space more than 1,000sqm increased 27% from June YTD 2015 to June YTD 2016, with a 22% increase in the number of leasing deals being conducted by this larger group.