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Australia’s office market recovers with strong growth in 3,000 square meter sector
Strong demand for 3,000 square meter plus office space is driving healthy activity and growth across Australia’s office sector as the market looks towards 2015, according to new figures. The Colliers International Office Demand Index quarter three report has recorded a 51% increase in enquiry for office space nationally at 626,237square meters, compared to the September 2013 quarter figure of 413,538 square meters. According to Simon Hunt, Colliers International managing director of Office Leasing, the growth in office demand, a barometer for the state of the market, was being driven by enquiries within the 3,000 square meter plus market, which increased 126% from only 147,301 square meters in the September 2013 quarter to 332,500 square meters this year. Some 47% of all enquiries recorded for September year to date was for 3,000 square meters or more. Breaking the figures down further shows the greatest spike in demand for office was in Sydney where space enquired for more than doubled from 102,486 square meters in the third quarter of 2013 to 235,660 square meters in the third quarter of 2014, an increase of 130%. ‘These Sydney numbers have been driven by a significant rise in demand for office space in the above 3,000 square meter market where only 29,601 square meter was enquired for in the third quarter of 2013 compared to 114,800 square meters in the third quarter of this year,’ said Hunt. Demand for office space also doubled in Canberra, with 112,600 square meters in the third quarter of 2014 compared to 58,090 square meters in the third quarter of 2013, again driven by enquiry in the 3,000 square meter plus market. The Office Demand Index also recorded positive signs of increases in demand in Adelaide, up from 29,251 square meters in the third quarter of 2013 to 49,920 in the third meter of 2014 and Brisbane, which rose, quarter on quarter, from 47,095 square meters to 53,687square meters. Enquiry in Melbourne was down from 166,785 square meters in the third quarter of 2013 to 150,851 square meters in the third quarter of 2014, primarily driven by increased activity at the smaller end of the market, where 65,063 square meters was recorded in the under 1,000 square meter market in the third quarter of 2013 compared to only 51,001 square meters In the third quarter of 2014. The over 3,000 square meter market, however, saw an increase from 53,500 square meters in the third quarter of 2013 to 61,700 square meters in the third quarter of 2014. Hunt said the growing enquiry levels nationally for space over 3,000 square meters pointed to a strong period of business expansion driven by white collar employment growth in the corporate sector. White collar employment growth was set to be strongest in the Financial Services, IT, Communications and Healthcare sectors, with national forecasts indicating that over 10,000 new jobs would be created in these sectors in 2015. It was anticipated that the mining, government and manufacturing sectors would have slightly weaker… Continue reading
Farm land values in England up 2% in 2014 as price growth slows
The average value of English farm land has risen by 2% to £10,100 per acre in 2014 with supply remaining at historic low levels, according to the latest data. But the rate of growth has slowed and there has been no change in values in since June, the figures from Smiths Gore show. They also reveal that values have risen by 5% in the past 12 months and by 20% in the past three years. ‘While demand for farms with houses and buildings has increased in the last year as non-farmer buyers return to the market for these types of farms after the recession, the strongest demand is from farmers buying bare land for purely farming purposes,’ said Giles Wordsworth, national head of Farms and Estates Agency at the firm. The data shows that bare land values average £7,400 per acre and have risen 4% in 2014, an increase of 2% in the past 12 months and by 27% in the last three years. Farms with houses and buildings, known as equipped land, have risen by 2%, 7% and 20% over the same periods and now average £11,000 per acre. And the value of arable land is increasing more than grassland at 8% compared with 6% in the past 12 months. Values are continuing to be supported by the lack of farmland available to buy, according to Smiths Gore. Some 10% less land has been marketed so far in 2014 compared with 2013. The 97,700 acres marketed so far is the second lowest amount marketed historically, with 79,200 acres in 2012 being an overall low point. There are significant variations between regions. The South West and East of England are the most active, with 19,300 acres and 18,000 acres marketed respectively in the year to date. The least active regions are the North East and North West, with 4,500 acres and 5,800 acres marketed respectively in the year to date. Continue reading
Prime central London property market sees second quarter of sales decline
The prime central London property market is seeing further adjustments with the latest figures showing that the overall value of properties transacted is down 21.1%. Properties under £2 million saw a decrease of 20.8%, while those in the £2 million to £5 million bracket went down by 27.1% in the third quarter of 2014 compared to the same period in 2013. The data from Strutt & Parker also shows that £5 million plus homes performed slightly better, but still saw a decline of 15.2%. A similar pattern emerged in terms of volume sales, which were down 26.8% overall, with all price bands seeing a reduction in the number of transactions. However, the firm points out that when looking back over the past five years, these statistics are not so concerning as the volume of transactions are actually up by 3.1% compared to the rolling five year quarterly average. Over the past five years, the £2 million to £5 million price bracket has seen a 20.9% increase, and the £5 million plus bracket is up by 19.6%. In contrast, the sub £2 million price bracket is marginally down by 2%. ‘Whilst total values transacted in central London are markedly down on this time last year, we must have a sense of perspective and accept that 2013 was an exceptional year. It is really not surprising that prices are stabilising after the dramatic price increases we saw over the past 12 months,’ said Stephanie McMahon, head of research at Strutt & Parker. ‘Sales volumes are also showing a slowdown and two quarters of data do suggest a trend of decline. This is as we predicted. We have seen these conditions before in the run up to a General Election when speculation mounts. It is a recognisable pattern and we do not believe it spells doom for the property market in the long term,’ she added. According Lulu Egerton, Partner at Strutt & Parker in Chelsea, there is no doubt that prime central London property is in the midst of a price correction. ‘Properties which are priced competitively and realistically are still selling and we are achieving good figures,’ she said. ‘After a spectacular year in 2013, asking prices had become inflated and they are now in a period of correction where prices are being adjusted down by around 5% to 10% as buyers become far more price sensitive,’ she added. Continue reading
