Office space demand increased across major Australian markets in first quarter
Demand for office space across major Australian markets is on the rise in 2016, according to new data from Colliers International.
According to the firm’s latest Office Demand Index, a total of 507,799 square meters of demand was recorded in the first quarter of 2016, a 33% increase from the fourth quarter of 2015.
Large businesses looking for more than 3,000 square meters of office space accounted for over 50% of the total area enquired for in the first three months of 2016, while representing just 9% of the total number of enquiries, by volume.
Small businesses looking for 1,000 square meters or less accounted for almost 80% of the total number of enquiries recorded in the first quarter this year.
‘We have found that compared to this time last year, on average, businesses are enquiring for more space,’ said Simon Hunt, Colliers International managing director of office leasing.
‘On a national level, the average area enquired for as of the first quarter of 2015 was about 888 square meters. In the first quarter of 2016 it increased to 1,050 square meters,’ he added.
Notable increases were recorded in Brisbane, where average size required increased to 1,287square meters in the first quarter, up from 774 square meters in the first quarter of 2015, and Canberra, which recorded a significant jump in average size enquired for from 1,167square meters to 1,942 square meters.
There was also an increase in average size requirement in the Sydney CBD, from under 1,000 square meters in the first quarter of 2015 to over 1,600 square meters in the first quarter of 2016. Locations that saw a small drop in average size included Sydney Metro and Melbourne CBD.
‘This quarter, we have seen the greatest number of large businesses enquire for office space in almost 10 years, which has contributed to the increase in the average area currently in demand,’ Hunt said.
‘This trend is also flowing through to transactions. In the first quarter of 2016, we have seen an increase of more than 15,000 square meters or 22% in the amount of office space leased. Larger businesses are doing the deals at the moment and this is showing up in both transactional and demand data. In the coming months, we expect smaller businesses will also increase their activity,’ he added.
According to Simon Crouch, Colliers International head of tenant advisory, much of this smaller demand had been created by the compulsory acquisition of buildings associated with the Sydney Metro project.
‘Since February 2016 we have been appointed by 10 businesses averaging 300 square meters in size who require expert advice to help them through the relocation process,’ he pointed out.