Sydney, 14 October 2013 – While the volume of sub-lease space in the Sydney CBD has declined, business contraction is continuing to impact the market according to the latest Sublease Barometer from CBRE.
The August barometer shows that the total volume of sublease space decreased by 2,377sqm during the month to 78,163sqm.
However, CBRE Director Office Services Jenine Cranston said the dip was not necessarily a reflection of overall market conditions, with 11 new sublease listings becoming available in August.
“Businesses looking to contract space and reduce operating costs continue to impact the sublease market, particularly in the finance and insurance sector,” Ms Cranston said.
“While we witnessed a reduction in the total volume of sublease space in August, this was the result of a number of larger office spaces being leased and we are seeing a positive early trend with several companies withdrawing space from the market to space bank for future use.”
CBRE’s Barometer shows that contraction remains the dominant driver of the sublease market, accounting for 57% of the space on the market. Consolidation and relocation are the other key drivers, respectively accounting for 23% and 20% of the available space.
Public sector contraction is also playing a continued role in the sublease market.
Other trends noted in the report include the fact that the majority of the sublease space available (79%) comprises large tenancies of more than 1,000sqm. Of this, eight options of more than 2,000sqm are currently available.
“Some of the smaller tenancies have come off the market as the costs associated with leasing space and the shorter sublease terms has meant that they are no longer viable,” Ms Cranston said.
Also of note:
Just over half (51% or 40,000sqm of sublease space) is in the city core.
The finance and insurance sectors lead the market, offering 42,303sqm of sublease space, well ahead of the next two contributors, being the public sector and the property/business services sector.
The finance and insurance sector also accounts for most of the larger sized tenancies as well as approximately half of both the number of opportunities and the floor space available.
The volume of prime sublease space is diminishing, having dipped by 7% in July and a further 2% in August
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