•Perth’s CBD office market turns the corner with two consecutive quarters of net effective rental growth. Prime net effective rents are up 6.6% y-o-y.

 

•Sydney and Melbourne continue their winning streak. Sydney prime net effective rents grew 2.4% over Q1 2019 (up 13.7% y-o-y) whilst Melbourne grew 2.3% (up 7% y-o-y). An overall expected contraction in stock in Sydney in 2019 will keep vacancy low and sustain further rental growth. Melbourne should also see continued rental growth this year in light of low vacancy and with the bulk of new supply scheduled to hit the market from 2020. 

 

•The Property Council of Australia (PCA) Office Market Report January 2019 revealed that all major CBD office markets recorded a decline in vacancy over H2 2018. All CBD markets recorded positive absorption over 2018, the first time since 2012.

 

•The investment market held up in Q1 2019 with $3.1bn recorded in office transactions, down on the record high achieved in Q4 2018 of $5.7bn but in line with the $2.8bn in the corresponding quarter last year. Yields remained stable over Q1 2019.