market overviews

record low vacancy rates

 

 

Melbourne CBD

The Melbourne CBD office market saw a further reduction in vacancy during the last six months of 2007 and has continued to tighten in the first half of 2008. The vacancy rate at January was 4.4% and we expect this to diminish further in the next few months.

The Melbourne CBD office market is now experiencing its tightest phase since the PCA began recording data in 1990 and that situation appears unlikely to change in the short term.

“The start of 2008 has seen changes in global conditions that are likely to limit medium term supply as new projects find it harder to get funding and as a result many larger tenants may be forced to renew leases in the medium term. The small to medium size tenants are faced with few options available in 2008 and 2009 and these tenants remain active, as such we expect a further decline in vacancy levels over the next six months. Options for larger premises on contiguous floors continue to decrease and the market tightens before the new developments with vacant space becomes available,” said Andrew Tracey, National Director, Office Leasing.

The market is also now strongly differentiating more between 'Green' and 'Non Green' buildings as tenants, particularly larger corporate, move to strengthen their environmental credentials.

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