The Sydney CBD commercial office market will be the prominent player in 2008. A rise in leasing activity is likely to take place with businesses re-examining the selection of purchasing as the costs of borrowing drain the bottom line. Strong tenant demand underpins a new round of construction with several new speculative buildings now likely to proceed.
The vacancy rate is likely to fall before new stock can comes onto the market. Strong demand and a lack of available options, the Sydney CBD market is likely to be a key beneficiary and the standout player in 2008.
Strong demand stemming from business growth and expansion has fueled demand, however it has been the decline in stock which has largely driven the tightening in vacancy. Total office inventory declined by almost 22,000m² in January to June of 2007, representing the biggest decline in stock levels for over 5 years.