According to the Global Office Index, prepared by property firm JLL, rents for office space in Sydney grew by nearly 4% over the September quarter, making it one of the strongest performing markets across the Asia Pacific region.
For the three-month period, Sydney’s office rents rose by 3.5%, while in the 12 months to the end of September they recorded annual growth of more than 8%.
Those figures far outstrip growth seen in the latest residential figures, which revealed rents for homes in Sydney grew by only 0.4% in the three months to the end of November and 2% over the previous 12 months.
“Sydney stood out across the region for quarterly rental growth at 3.9%, followed by Hong Kong at 3.5%. The next strongest quarterly uplifts were Shanghai at 2.4%, Beijing at 1.9% and Bangalore at 1.9%,” JLL’s Australian head of office leasing Tim O’Connor said.
“Several other markets recorded modest rises [of] 1% - 1.5% including Auckland, Mumbai, Chennai and Osaka. The annual rental growth for Sydney from the third quarter of 2014 to the third quarter of 2015 was 8.2%, which is a strong result,” O’Connor said.
Sydney’s growth over the quarter was far stronger than the region-wide growth, with rental growth of only 0.5% seen across the Asia Pacific in the quarter. The harbour city is predicted to continue to see strong growth for its office stock.
“Single-digit rental growth is generally forecast across the Asia Pacific region. Among the major markets, Sydney and Hong Kong are likely to experience the strongest rental uplift by year-end 2015, while Sydney and Tokyo are anticipated to show the highest growth next year,” O’Connor said.
“Domestic financial institutions and tech firms continued to be the main drivers of demand for prime space across the region.”
