Major Tenants Search For Sydney Office Space
AUSTRALIA – Multinational investment bank Credit Suisse and gambling group Tabcorp have joined law firms and insurance behemoths on the hunt for commercial space across Sydney, as employees begin returning to their workplaces, reported The Sydney Morning Herald on Tuesday evening (22 March, SGT)
The focus of the office search for the majority of the bigger office tenants is on prime office building. But as such commercial properties are expected to be close to full occupancy or entirely leased in the next 2 years, there could be a rental bidding war for these office spaces, pushing up their rents.
At present, it is estimated that major companies are seeking to lease over 538,200 sq ft of office space, with Credit Suisse, Tabcorp, and toll-operator Transurban seeking to occupy 53,820 sq ft of office space each, while Tourism Australia and Sunsuper Superannuation Fund plan to lease up to 21,528 sq ft.
One of the latest office leasing deals is law firm Johnson Winter & Slattery (JWS), which agreed to take up a 37,674 sq ft workspace at Quay Quarter Tower for 10 years.
Situated along 50 Bridge Street, the soon-to-be-completed office building is part of the A$2 billion Quay Quarter Sydney project, which is jointly owned by AMP Capital Wholesale Office Fund and Dexus Wholesale Property Fund.
“We are seeing quality office space is greatly sought after, as businesses prepare to welcome people back to the office,” said Kit Georgeos, fund manager at AMP Capital Wholesale Office Fund, who added that the office rental deal shows there is still robust interest in premium office space.
In fact, a new study by Jones Lang LaSalle (JLL) of formal tenant briefs in the market between January and February 2022 revealed that Sydney made up 60 percent of all tenant briefs across all office markets in Australia.
This was “by far” the highest percentage seen across all Australian office markets and is in line with pre-COVID levels, noted Will Hamilton, Head of Sydney CBD leasing at JLL.
“We continue to see good levels of demand across smaller and larger occupiers of space, with the leasing momentum seen in 2021 continuing this year.”
He also disclosed that those searching for new offices are looking for bigger footprints that are usually found in the newer, higher-quality office buildings.
“Reflecting the continued flight-to-quality trend, premium and A-grade office space had the highest levels of tenant inquiry,” added Hamilton.