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AFR | Melbourne market leads region
18 August 2010
Melbourne’s office market is one of the strongest performers in the Asia-Pacific region.
Melbourne recorded the second strongest quarter-on-quarter rental growth for prime space, pipped only by Hong Kong, according to a report by global property adviser DTZ.
Melbourne's prime rental growth of more than 2 per cent over the quarter surpassed comparable growth in Beiijing, Delhi and Singapore.
That rental growth is expected to continue in 2010-11.
David Green-Morgan, DTZ's Asia Pacific head of research, said Melbourne had dominated the national office market and that was expected to continue throughout the year.
"Hong Kong and Singapore may be the tigers of the Asia-Pacific region, however Melbourne is also emerging as one of the strongest performers in terms of rental growth, net absorption and forecast demand," he said.
The regional comparison follows the release last week of Property Council of Australia figures showing Melbourne's vacancy rate has dropped to 6.5 per cent, the lowest in Australia.
During the first half of the year Melbourne recorded a net absorption rate of 68,996 square metres, more than twice the 20-year average, according to PCA data.
Mr Green-Morgan said leasing activity in Sydney had slowed towards the end of the second quarter after a healthy first quarter.
Occupiers were showing signs of caution in response to the European debt crisis, coupled with the imminent arrival of new office space to the market, he said.
DTZ has forecast prime rents in the region to grow by an average of 6.2 per cent between 2010 and 2014, with Hong Kong and Singapore both expected to outperform.
The Australian Financial Review | Nick Lenaghan |
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