The Sydney CBD office market – Assessing the downside risk06.05.2012
In this Pulse paper, we explore the short to medium-term supply and demand outlook for the Sydney CBD office market.
The demand environment will be challenging in 2012. There is an expectation that sub-lease availability will rise and the leasing process – from enquiry to execution – will remain elongated.
While there are risks to the demand-side of the equation, the upside risk to vacancy is mitigated by the supply outlook. There is currently 88,400 sqm of space under construction in the Sydney CBD, equating to 1.8% of total stock. The current supply outlook is the fourth lowest since 1970 when measured as a percentage of total stock.
In this Pulse paper, we explore the short to medium-term supply and demand outlook for the Sydney CBD office market. We have undertaken sensitivity analysis on the demand-side of the equation to assess a ‘worst case’ impact on the vacancy rate over the next two years.