2020 office market report released
The latest Property Council of Australia’s Office Market Report has revealed significant opportunities for businesses in the Sydney CBD office market with over 130,000sqm of supply to be unlocked in 2020.
The Sydney CBD vacancy rate remained steady with only a slight increase from 3.7 per cent to 3.9 per cent mainly due to negative demand, as demand has risen in areas outside of the CBD. However, expected supply of office space is set to significantly increase by 370,000sqm over the next couple of years especially in the Premium A-Grade segments, responding to positive demand.
Property Council of Australia’s NSW Executive Director Jane Fitzgerald has said “Sydney’s office market has traditionally been very tight, and though it has always been strong, opportunities for larger corporations to move to the Sydney CBD have been limited by a lack of available office space of the right size, scale and standard.
“However, with a large pipeline of premium office space expected to enter the market over the next few years, this is a positive sign for the industry and will unlock major opportunities for companies to explore options to invest and relocate workforces into Sydney CBD.”
Read more about the office market report here.
Key market indicators, Sydney CBD (aggregate)
|
Grade |
Vacancy, Jan 20 (%) |
Vacancy, Jul 19 (%) |
Net absorption, 6 months to Jan 20 (sqm) |
|
Premium |
3.6 |
2.7 |
19,286 |
|
A |
2.6 |
3.1 |
19,847 |
|
B |
5.1 |
4.2 |
-51,581 |
|
C |
6.8 |
6.2 |
-5,533 |
|
D |
3.7 |
5.9 |
-165 |
|
Total |
3.9 |
3.7 |
-18,146 |
sydney housing supply forecasts
The Department of Planning, Industry and Environment released its annual housing supply forecast for Sydney, which has shown that 191,000 new homes are predicted to be built in the next five years between FY 2019/20 to FY 2023/24.
The forecast constitutes a five-year pipeline of new housing coming from current planning controls, development approvals and construction underway. The Department has released statistical data for each district and local government area in Sydney.
About a third of Sydney’s new housing will be built in the Central Sydney District (Parramatta, Blacktown, The Hills and Cumberland Councils) with more than 61,500 new homes forecasted. About a quarter of Sydney’s new housing (45,200) homes has been forecast for the Western City District. The three districts in the Eastern City are forecast to deliver 84,000 dwellings and represents about 44% of the pipeline.
The forecast number represents a point in time estimate (approx. June 2019) of Sydney’s future housing supply based on the current housing approvals and construction activity, as well as projects take-up of land currently zoned for housing. A substantial volume of the pipeline consists of approved or commencement developments.
Each year the Department invites representatives from the development industry to assist with validation of these figures and the underlying assumptions that have been used to develop the forecast. Members of the Property Council participated in this process. Read more about the forecasts here and here.
2019 nsw employment lands monitor
The Department of Planning, Industry and Environment has released the 2019 Employment Lands Development Monitor (ELDM) which provides data and information on lands zoned for industrial or similar purposes.
The ELDM covers Greater Sydney, Central Coast, Hunter and Illawarra Shoalhaven and contains information on:
- the current availability of zoned employment land, business parks and other land where jobs are created
- where employment land is serviced and ready for development
- where development on employment land has recently taken place, and
- where potential future employment lands and business parks will be located, and
- the outlook for commercial property including the industrial, office and retail sectors.
In Greater Sydney, there were 13,770 hectares of total Employment Lands in Precincts and $1.3 billion of industrial buildings were approved. In the Hunter, there were 8,117 hectares of total zoned Employment Land and $126.9 million of industrial buildings were approved. The Illawarra Shoalhaven had 3069 hectares of total zoned Employment Land and $61.5 million of industrial buildings approved. Read more here.
Update on nsw building reforms
The NSW Government has announced new reforms to improve building standards and increase consumer confidence in the sector. New powers, through regulation, targeting the residential sector will be given to the NSW Building Commissioner to ensure they are able to stop defective apartments being built.
A quality-rating regime will be implemented which will be based on builders and developers building history. The rating system will include ranking builders, developers and certifiers according to their record on workplace safety, their track record on customer complaints, the age of their business, and financial credibility. A low rating will attract increased scrutiny of their projects.
The NSW Building Commissioner, David Chandler will also be given the power to block the building and remove an occupation certificate if a project is deemed to be unsound. He has also committed to the total digitisation of the sector, to allow key documents to be accessed instantaneously.
The Minister for Better Regulation and Innovation, Kevin Anderson will be presenting the reforms at the next Building Ministers Forum. To streamline the reform process, the Government has also established six work streams with each area underpinned by a working group.
The NSW Government will have industry representatives on each of these working groups. The Property Council will continue to engage with Government and strongly advocate on behalf of members on this important issue. Read more about the reforms here.
If you require further information please contact Emma Ashton, Senior Policy Advisor