A fillip for building service contractors (BSCs) has come with news from Colliers International that appetite for leasing Australian office space is on the rise with year-to-date enquiry levels up 33 percent on the same time last year.
Colliers International managing director of office leasing Simon Hunt said the latest enquiry figures showed activity in Australia’s office markets was strong despite industry concerns surrounding sentiment.
“According to Colliers International’s latest report, Negotiating the Swell: What’s in the Pipeline for CBD Office Tenant Demand, lease enquiries were 33 percent higher in H1 2013 compared to the same period last year,” Hunt noted.
There have been 310 more enquiries for an additional 273,989sq m of office space this year. Year to June 2013, Colliers International recorded 1,351 enquiries, compared to 1,041 enquiries for the same period in 2012.
Deal volumes had remained relatively consistent – 263 year to June 2013 compared to 272 for the same period last year. Despite a fall in the total size of office space leased, the number of lease transactions in the first half of 2013 was 4.4 percent higher than in H1 2012.
“Small and medium sized tenants are in the market looking to secure a good deal, and are helping to drive current levels of activity,” pointed out Hunt.
“We have heard a lot of doom and gloom about the office leasing market this year, but the facts are that there is activity in the market. Enquiry is positive, and I think it is worth considering amongst all the negativity and pessimism surrounding the market at present.
“Deals are being done and people are looking for space. In Sydney CBD, we have seen more than 215,000sq m of enquiry during the first half. In the Melbourne CBD, there were 158 enquiries for over 132,000sq m of space, compared to 140 enquiries for just over 81,000sq m over the same period in 2012.”
The largest proportion of deals was occurring in the 1 to 999sq m range, with 279 leases equating to 82,810sq m taking place in the first half of 2013. This compared to 43 deals totaling 68,147sq m in the 1,000 to 2,999sq m bracket and eight deals totaling 58,781sq m in the above 3,000sq m range.
Colliers International data found professional services were responsible for a large proportion of the activity, driven by new leases to businesses such as AGL, BHP, Corrs Chambers, Pacific Brands, Virgin Active, IBM and United Energy. There had been a marked rise in the number of Information Technology and Communication companies in particular looking to relocate, with this sector making up 20 per cent of enquiries.