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Office demand on the up in Sydney

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When it comes time for a business to expand, new office space is often essential. Currently, the demand for new spaces is surging in the Sydney CBD, according to the Property Council of Australia.

In turn, this is likely to broaden the horizons of businesses assessing the feasibility of new properties.

The organisation explained that the strong economy in the massive city is underpinning the growing demand, and leading to the lowest vacancy rates in over five years across the CBD. In fact, the Sydney vacancy rate fell from 7.4 per cent to 6.3 per cent in the six months leading to July of this year.

NSW Executive Director Glenn Byres noted that the economic momentum in the city is fuelling the market, and feeding the demand for office space.

"Demand reached its highest level in over four years and is double the historical average, with net absorption over the past six months totaling 60,405sqm," he said.

"The vacancy rate is now the lowest it has been since January 2009 and has been cut from 8.4 percent in just the past 12 months."

Will this shrinking vacancy rate pose an issue for those companies seeking to expand?

The answer is no, at least if planned office developments go ahead in the next year. Mr Byres explained that 160,337sqm of new office stock will enter the market near the end of 2015, and an additional 129,176sqm will follow in 2016.

It's likely that, given sustained demand, the amount of new office space will continue to surge upwards in the next few years. It is certainly possible in Sydney given the significant growth of the city.

Now could be an excellent time to consider an investment in the property market, as the demand for office space continues to ramp.

Date Published: 17 Aug 2015
Category: General News

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