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Office market regains momentum as Aussies return to work

20 November 2020 Bianca Dabu
Office market regains momentum

October has seen another strong month of deals occurring within the commercial real estate market as people return to work and the economy across the nation begins to reopen and grow once again, Colliers International found.

In October alone, Colliers’ Office Leasing team nationally transacted 52 deals for over 55,000 sq m of office space — the highest monthly result in terms of the amount of space transacted for 2020.

According to the company’s managing director for office leasing, Simon Hunt, “these numbers provide us with confidence that while businesses did put their real estate decisions on hold during COVID-19 restrictions, they’re now feeling much more comfortable with how the market is playing out and as a result are transacting”.

This positive trend is especially true in metro markets, such as Sydney and Melbourne, Mr Hunt said.

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In fact, the Sydney CBD market has witnessed a steady growth of transaction flow, with a total of almost 50,000 sq m transacted in 2020 to date.

Surprisingly, the Melbourne Metro market has the strongest-performing market all year round, according to Mr Hunt.

“In October, we saw this market again transact the most amount of area; and even though the city is only slowly reopening, in October alone, the Melbourne CBD team transacted almost 20,000 sq m of office space,” he said.

In terms of enquiry demand, Mr Hunt said that the office leasing market has become more steady compared to the year prior, with only a slight 3 per cent decrease on the number of enquiries and a 5 per cent increase in the area enquired for October year-to-date figures.

Looking across the past quarters, Q1 recorded almost 200,000 sq m more enquiry than Q1 2019, mainly due to the larger briefs hitting the market in the CBD locations. Meanwhile, Q2 and Q3 remained stable across 2020 and 2019 trends.

“So, despite the onset of COVID-19 restrictions, we still saw businesses enquiring and seeing what was in the market and what deals they could get,” Mr Hunt highlighted.

Metro locations are now proving to be more popular than CBD locations based on enquiry as businesses look for cost-effective locations as well as areas closer to home.

“With Melbourne now reopening and all other locations returning to somewhat of a normal working balance, we expect that businesses will look to pursue their real estate decisions to ensure they get the best possible option for their business,” Mr Hunt said.

Office market regains momentum as Aussies return to work
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