In early 2014 Colliers reported leasing in all sectors was expected to improve over 2014 with increased demand for business premises across office, retail and industrial and investment property. Highlights of the agency’s 2014 property outlook included:
- Office leasing enquiries in Sydney increased by 54% in 2013.
- Industrial leasing is being driven by logistic operators and developers are building large footprint warehouses on a speculative basis to accommodate them. Tenants of these warehouses can negotiate generous incentives. Supply of smaller properties (less than 5,000 sqm) is scarcer. SMSF’s are looking for well maintained assets with minimal, short-term capital expenditure.
- In retail leasing, food retailing is supporting rental growth in shopping centres.
- On the development front, conversions of commercial office buildings to apartments and hotels with a total of 102,121m² of office space earmarked for conversion to residential in Sydney.
- Residential property prices increased 11.6% in 2013 and growth is expected to continue but not at such high levels.
There’s a recent update of the industrial sector from independent property advisory firm, m3property. Its Sydney Industrial Comm3ntary Winter 2014 report confirms demand for industrial space has been moderate in Sydney with activity levels strongest in the Outer and Central West submarkets. There is increased logistics activity due to increased retail trade particularly growth in online retailing requiring more warehouse space to store and distribute goods. Growth was up 8.6% from March 2013 to March 2014 , up from 4.6% over the same time last year. However, industrial rents and land values remain largely stable. Primary and secondary warehousing stock is seeing moderate demand but secondary properties accommodating manufacturing are seeing little demand and higher incentives.
Andrew Kleiman, Legal Practitioner Director