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Australian office leasing market growth led by New South Wales
The New South Wales office leasing market is leading the way in the Australian commercial market in the first half of 2015, with almost twice as much office space leased year on year. There has been a 13% increase in the number of leasing deals done nationally in 2015, compared to the first half of 2014, according to figures from Colliers International. The amount of space leased is up 22% from 198,360 square meters last year to 241,551 square meter this year, led by New South Wales with 112, 937 square meters leased year to date, compared to 64,629 in the first half of 2014. Cameron Williams, Colliers International National Director of Office Leasing, said there was increased traction nationally at the larger end of the market. ‘This is in contrast to 2014 enquiry data, which is a reflection of what we are seeing on the ground. Larger firms are driving demand for office accommodation in 2015 compared to 2014, when we saw smaller space in strong demand,’ he said. ‘Our enquiry data for the second quarter of 2015 also shows a significant shift in the industries searching for office space,’ he added. The research also reveals that in 2014 the government sector dominated as they put large requirements into the market. However, moving into the second half of 2015 it is business services, communications and finance that are catching up and dominating both in enquiry levels and leasing deals being negotiated. Businesses searching for substantial office accommodation were driving demand across key office CBD markets, with the business services, communications and finance sectors accounting for the lion’s share of enquiries. Overall, enquiries for office space nationally increased by 31% from the second quarter of 2014 compared to the second quarter of 2015 for office space in the 1,000 square meters to the 3,000 square meters category. Sydney in particular saw an increase in this category, with a 25% rise in demand from the first quarter of 2015 with 51,003 square meters to 63,650 square meters in the second quarter. Williams said activity was increasing in the Sydney CBD office market, particularly in the last quarter. ‘The big change has been growth. The tenants that are in the market at the moment are predominantly growth driven,’ he explained. ‘The growth in the market is mostly being driven by technology companies and finance. At the smaller end of the market there has been a lot of activity from Asian investment companies that have a preference to be located in Sydney’s midtown,’ he said. ‘This growth is naturally having a positive impact on net absorption and lessors are becoming more confident,’ he added. Continue reading
Almost half of UK renters will never get on the property ladder, poll suggests
Some 44% of renters in the UK believe they will never own their own home with not being able to afford a deposit the most common reason for not getting on the property ladder. Just 2% of renters plan on getting on the property ladder this year, according to an independent survey for construction and regeneration company Keepmoat. The average house price in England and Wales now stands at £178,000, according to the latest Land Registry figures, although significant regional variations exist. The average price of property in the capital is currently £462,799. Despite houses in the North generally being more affordable, non-homeowners in Liverpool at 62% were the most likely to say they never expect to purchase a property. This was followed by 60% in both Newcastle and Glasgow and 41% in London. Not being able to afford a deposit was by far the most common reason for not getting on the property ladder, cited by 56% of respondents. The pressure of saving a deposit was also the top concern for those hoping to buy a home at 58%, with 61% of this group saying they will be saving their own deposit. Some 38% of home owners polled said it took between two and five years to save for a deposit although it took 13% of those polled up to 10 years to save their deposit. The research also suggests low awareness of the government’s Help to Buy scheme, an initiative that helps people take their first steps on the property ladder. Less than one in three prospective buyers polled said they will be using the scheme, with 38% claiming they don’t know what the scheme is. ‘It’s clear that the amount of money first time buyers need to raise for a deposit continues to stop many from getting on the property ladder. However, we were surprised that the results show Londoners are more confident about owning a home than those in other cities, particularly in the North,’ said Dave Sheridan, chief executive of Keepmoat. ‘There is plenty of assistance available for buyers in the form of the Help to Buy scheme and help is available when saving for a deposit with the Help to Buy ISA,’ he added. Continue reading
London leads eight year high in European corporate real estate sales
Some €14.6 billion in European corporate real estate assets were sold in Europe in 2014, the highest number for eight years, with London leading the growth, new research shows. Over 350 deals were recorded thanks to a continued low interest rate environment and exceptional levels of equity pouring into real estate, according to a new report from JLL. Since 2012 the number of companies raising capital from real estate assets in Europe has been on the increase, coinciding with a period of rising real estate values, the report points out. Indeed, in a separate recent survey from JLL some 40% of respondents reported increasing demands from senior leadership to raise capital through the real estate portfolio. JLL expects this market momentum to continue as businesses take advantage of opportunities to create a property portfolio that better meets their needs whether it’s reusing capital to support business growth, obtaining greater flexibility to aid downsizing or removing unwanted surplus property. ‘Companies are now faced with a once in a cycle opportunity to exploit the best market conditions since 2007. Last year global real estate investment volumes stood at US$710 billion, a level only ever exceeded in the peak of 2007,’ said Michael Evans, head of Corporate Capital Markets at JLL. ‘This momentum has continued into 2015, with an abundance of equity targeting real estate. This presents opportunities for companies with owned real estate to raise capital via sale and leasebacks. Activity has been widespread across Europe involving a range of companies with appetite across a variety of sectors and asset types,’ he added. The report has identified that traditional office and industrial occupiers across pharmaceuticals, energy, manufacturing, IT and telecoms dominated European corporate sales last year, accounting for 38% of activity. Meanwhile hotel operators made up 27% of the sales market followed by retail at 16%. The most notable sales were seen in the media and telecoms sector which included the largest corporate property sale of 2014, sold for €680 million in Paris. In terms of locations, the UK, Germany and France continued to govern the volume of corporate real estate sales, representing 60% of European activity in 2014. This was driven predominantly by the UK, with an 18% year on year increase and almost double the volume achieved in 2008. Spain and the Nordics also featured strongly with 18% of total corporate sales last year. According to Karen Williamson, associate director for EMEA research, with such a compelling market now is the time for companies to rethink their own versus lease decisions. ‘There are a range of solutions available to companies considering raising capital from their owned real estate. Sales can benefit the wider business by allowing capital to be recycled back into the organisation to support growth and expansion,’ she explained. ‘It can also be used to enable financial flexibility and unlock value from assets as part of a planned… Continue reading
