This article is from the Australian Property Journal archive
OFFICE rents in Sydney, Perth and Brisbane have held up defying the global decline. DTZ's survey also shows Tokyo has taken the mantle of having the world's most expensive city.
According to DTZ’s 12th annual Global Occupancy Costs – Offices report, six Australian cities are among the world’s 100 most expensive.
And whilst Sydney rents slipped slightly (down 0.2%) the city flew the flag with a ranking of 40 up from 46 in 2008 – well ahead of major cities such as Chicago and Shanghai and just 13 places behind downtown New York.
Sydney’s total occupancy costs per workstation were $US9,810 per annum.
Perth was one of the biggest movers, jumping a considerable 19 points from rank 62 in 2008 to 43 followed by Brisbane at 46th place. Occupancy costs rose 24.2%from $US7,640 pa to $US9,490 pa.
However, Melbourne, Canberra and Adelaide have faltered.
Melbourne office rents slipped from 84th place to 86, Adelaide fell from 86 to 97 and Canberra from 86 to 91st place.
Melbourne costs declined 6.4% from $US5,930 pa to $US5,550 pa, Adelaide decreased 21.2% from $US5,510 pa to $US4,340 and Canberra fell 29.4% from $US6,630 pa to $US4,680 pa.
DTZ’s national research director David Green-Morgan said 2008 was a mixed year for Australian office markets, with the first half of the year characterised by strong rental growth across all markets, on par with that seen in 2006 and 2007.
“However, by the middle of the year the slowing economy started to weigh on the office market and growth ground to a halt.
“As we move into 2009, incentives are increasing rapidly and there is a strong probability that face rents will decline in all CBD markets in the year ahead, with Perth and Brisbane at risk of the biggest falls,” he added.
Green-Morgan said sub lease space would continue to rise as companies further rationalise staffing levels and look to drive costs down further.
“While we expect negative rental growth during 2009 and 2010, the lack of new supply should prove positive in the longer term for Australian office markets. That being said, we can expect vacancy rates to hit double figures in many markets as demand for space continues to deteriorate,” he added.
The report also shows Tokyo (Central 5 wards) has overtaken London’s West End as the most expensive office location on a per workstation basis.
The Top 10 most expensive office locations by occupancy costs in the DTZ survey are:
1. Tokyo (Central 5 Wards) ($US22,820) 26.1% year-on-year increase
2. Paris AUD$34,464 ($US22,300) -0.4% year-on-year decrease
3. Hong Kong AUD$33,892 ($US21,930) -13.3% year-on-year decrease
4. Dubai AUD$33,413 ($US21,620) 42.9% year-on-year increase
5. London (West End) AUD$33,027 ( ($US21,370) -32.2% year-on-year decrease
6. Moscow AUD$28,995 ($US18,760) 15.9% year-on-year increase
7. New York (Midtown) AUD$28,516 ( ($US18,450) 6.2% year-on-year increase
8. Abu Dhabi AUD$28,114 ($US18,190) 63.4% year-on-year increase
9. Madrid AUD$26,507 ($US17,150) 5.1% year-on-year increase
10. Singapore AUD$25,564 ($US16,540) -3.0% year-on-year decrease
Meanwhile Green-Morgan said only 3% of the business districts are optimistic about an upturn in occupancy costs, while the remaining 19% expect occupancy costs to remain stable.
“The negative growth was forecast at a global level, with more than three quarters (78%) of the 114 business districts surveyed globally expecting occupancy costs to fall in 2009.
“Similar sentiments are reflected in Asia Pacific, where 76% of the markets surveyed expect office occupancy costs to decline while 24% expect occupancy costs to remain stable over the year.” Green-Morgan said.
Australian Property Journal
