Dexus Research provides insights on where office demand will come from and forecasting a 6.5% Sydney CBD vacancy rate.
In mid-2013, when office demand was contracting, Dexus Research published a Leading Insight paper, Where will Office Demand Come From?
In the paper, Dexus Research predicted that:
- Demand would improve dramatically, driven by rapid growth in the service sector including professional services, technology, education and finance
- Overall jobs growth would outweigh the contraction in space due to workplace changes
- Employment growth in these industries has been positive, driving strong demand for office space in Sydney and Melbourne CBDs, with over 250,000 square metres of space absorbed in each market
In early 2015, Dexus Research published a Leading Insight paper, A 6.5% Vacancy Rate for the Sydney CBD outlining the factors that would drive a reduction in vacancy from 9.5%
This was the most bullish prediction in the market at a time when many market observers thought vacancy would rise due to new supply from Barangaroo
- The market is performing in line with DEXUS Research’s forecasts
- At 30 June 2016 the Sydney CBD vacancy rate was 7.1% and trending lower
- DEXUS Research has since revised its forecast to sub-5% by FY18