How would you characterise your market at the moment?
There is definitely activity at the larger end of the market with healthy take up of space over 1,000 sqm across North Sydney and Chatswood. Prime grade vacancy levels in these two precincts are falling as tenants look to their long-term futures. St Leonards vacancy across all grades has seen some activity, although limited for larger enquiries.

Are there any trends you are noticing among the tenants you are talking to?
Sub 500 sqm tenants are still looking for suites that are fitted-out whilst larger tenants have a preference to tailor a fit-out for their purpose. Incentives, whilst reducing, are still the compelling influence in relocating.

What do you think will be the biggest influence on your market in Q2?
It remains the subdued growth globally. Whilst fundamentals appear to be improving, typically for a number of tenants there must be a compelling reason to relocate.

What will rents and incentives do in Q2?
Face rents across the North Shore will continue to grow, albeit at a faster rate than effective rents. We will see a further reduction in incentives as vacancy rates continue to reduce across all markets.

What should landlords do to adapt to these market conditions?
Keep stock of recent deals and by all means, seek out advice on the positioning of their assets if they are unsure.

Paul Lynch
Director, Leasing, North Sydney
paul.lynch@ap.jll.com

Recent Leasing Deals

• Coffey International has leased 3,500 sqm at 799 Pacific Highway, Chatswood.
• Sara Lee has leased 1,800 sqm at 924 Pacific Highway, Gordon.
• Bedford Titley has leased 940 sqm at 141 Walker Street, North Sydney.

Key Indicators

Market Balance, as at March 2012

Download a PDF of the North Sydney Q112 Market Overview