Shifting dynamics signal more positive outlook for Sydney CBD

​Sydney, 21 November 2013 – Market dynamics are shifting in the Sydney office leasing market, with an increase in larger enquiries and some long waited signs of life in the financial services sector.

CBRE Senior Director, Office Services, Tim Molchanoff said the firm had received 101 CBD leasing enquiries in Q2 and Q3 this year for a combined total of 171,890sqm of space.

While this was marginally down on the 106 enquiries in the same period in 2012, the total space required was markedly up on last year’s tally of 148,7310sqm.

This indicates that larger tenants have been increasingly active, with 39 separate enquiries in the 1,000sqm-plus size bracket.

“One of the most encouraging signs has been the increase in enquiry and the number of deals finalised with tenants in the finance and insurance sectors,” Mr Molchanoff said.

“While the majority of enquiry this time last year was from the legal sector, by far the strongest level of enquiry in Q2 and Q3 was from finance and insurance tenants. Our data highlights a combined requirement for circa 103,385sqm of space, up from just 17,250sqm in the same period in 2012.”

On the flipside, enquiry rates from legal tenants dropped significantly, from circa 40,000sqm to 10,075sqm.

Mr Molchanoff said recent activity involving financial services groups included State Street taking a 1,425sqm floor of sublease space off the market at 420 George Street and Bank of Queensland committing to levels 8 & 9 of 126 Philip Street totaling 2,900sqm.

Westpac had meanwhile taken two additional floors within 151 Clarence Street while State Super Financial had leased1,200sqm of space  in 83 Clarence Street

That level of activity is expected to continue given the number of financial / insurance groups presently actively in the market at present among them Mizuho Corporate Bank for  2,800sqm of space, Gresham Partners  (1,200sqm), SGE Credit Union (1,200sqm), Bank of America ( 8,000sqm), Rabobank (12,000sqm), Flexigroup (3,000sqm), Pacific Equity Partners (1,200sqm),   GenRe (1,300sqm), IAG (30,000sqm), Willis Australia (2,700sqm), and QBE (8,000sqm).

“Over the past six months it’s been pleasing to see a heartbeat again in the finance and insurance sectors, with a range of groups not only assessing their options but also seeking additional space which we haven’t seen for quite some time,” Mr Molchanoff said.

“These groups are taking advantage of the current market opportunities to secure higher quality space and look at smarter ways of working to position themselves for the next five to 10 years.”