This article is from the Australian Property Journal archive
DEXUS has had a robust September quarter, leasing over 100,000 sqm of commercial space in Sydney, Brisbane and Melbourne.
In the three months to September, Dexus leased 58,788 sqm of office space across 74 transactions, notable deals 7,160 sqm at 385 Bourke St, Melbourne, 4,363 sqm across four transactions at 45 Clarence St, Sydney, 3,073 sqm across six transactions at 56 Pitt St, Sydney and the group recently securing the NBN to 100 Mount St, North Sydney for 20,364 sqm.
The deals reduced Dexus’ FY18 expiries from 7.2% at 30 June 2017 to 5.9%. Occupancy by income increased to 97.5% from 97.2% at 30 June 2017 across the total office portfolio, while the weighted average lease expiry (WALE) reduced marginally to 4.6 years.
It also leased 43,114 sqm of industrial space across 28 transactions, increasing the portfolio occupancy increasing to 96.6%.
However Dexus has had to provide for sweeteners, with the average incentive rising from 14.5% in June 30 to 18%.
Dexus executive GM Kevin George said strong activity in the Sydney and Melbourne office markets contributed to the result.
He added that average incentives increased in the three month period, reflecting leasing undertaken in Brisbane where Dexus has recorded incentives in the low 30% range compared to Sydney and Melbourne which recorded 13.5% and 19.2% respectively.
George said through negotiating favourable terms on lease expiries, Dexus has an opportunity to capitalise on the strength of the Sydney market, which represent 63% of expiries over the next three years to the end of FY20.
In the industrial portfolio the FY18 lease expiry reduced from 8.6% at 30 June 2017 to 6.4%. Notable deals include Kalari Transport for 17,696 sqm at Gillman in Adelaide increasing occupancy to 100%, 16 leasing deals totalling 7,394 sqm at Axxess Corporate Park, Mt Waverley in Victoria and two tenants across 6,420 sqm at 30 Bellrick St, Acacia Ridge in Queensland.
Dexus has reiterated its market guidance for the 12 months ending 30 June 2018 of distribution per security growth of 4.0-4.5%.
Australian Property Journal
