While a trophy asset would test the 6. 5% equated yield barrier, in general the prime investment market is expected to see stabilizing yields even while the investment demand remains at the current high level. The vacancy rate within the Brisbane CBD is anticipated to remain at extremely low levels for at least the next 18 months as the new supply and refurbished projects brought to the market in that time will be swiftly absorbed.
Based on the expected economic growth levels and white collar growth levels, net absorption within the CBD is forecast to remain above 40,000m² on average over the next three calendar years. This subject to the present forecasts provided by economic commentators remaining on course. The $600/m² gross effective price barrier has been breached, and rents at this level will continue to be seen over the next two years.
Rental growth for the CBD has been exceptional over the past two years, and while the demand levels for office space is expected to remain high, there is a ceiling to rents rapidly approaching. The anticipated relocation of some medium sized tenants to purpose built near city accommodation during 2007 and 2008 will provide some alleviation to rental growth pressure. Property valuation course Office properties with significant reversionary or market re-positioning opportunities will continue to test the lower yield range.
Investment demand within the CBD is high, as it is across all market sectors at this time.With Mexico and Brazil leading the way, annual increases in industrial production exceeded 10% throughout the region. Mexico’s maquiladora industries reversed employment declines by adding 56,000 jobs in 2004.
In a similar way to the Brisbane CBD, the Brisbane near City market has benefited from sustained business and therefore tenant growth, within an environment of lower than average net additions to the office market stock.The supply pipeline is now building with some 140,000m² of new office accommodation planned for the Near City market within the next two and a half years. While 60% of this space comes from buildings of 10,000m² or greater, the remaining 40% is within smaller buildings, allowing for more elasticity and flexibility in the timing of delivery of this space.
Net absorption in the Near City was higher during 2004/05 at 66,732m² than in 2005/06 with 29,367m²; however this was reflective of tight supply and limited market opportunities. Asked on economic forecasts and the likely overflow of tenants from the CBD, particularly until the next major wave of CBD buildings are delivered 2008-2009, the Near City is expected to see continued strong net absorption levels. The expected average net absorption for the next three years is a touch over 34,000m².
Vacancy rates in the Near City are expecting to maintain the current tightness as the supply additions to the market are fully taken-up. This will begin to turn around in mid-2007 as supply accelerates.Rental levels in the Near City have been climbing over the past 18 months, with 20% growth on average gross effective prime rents over the 12 months to July 2006 and 8% the year before.
While spectacular, this is below the level of growth seen in the CBD market (57% over the past two years, as opposed to 28% for the Near City). Therefore it is expected that the rental growth run may last a little longer in the Near City with average rental growth of 4.6% per annum over the next three yearsAs with the Brisbane CBD the Near City market is expected to see accelerating construction levels over the next two years. In general the construction in the Near City has shorter lead times than the CBD and projects can be delivered to satisfy the immediate demand for office accommodation.In addition there are several projects in the 3,000 – 5,000m² size brackets with development approval. The commencement of construction on these projects is subject to pre- commitment and could proceed at any time over the next two years.Larger buildings on the drawing board which may come on line during 2008 include the second tower at Centenary Square, 100 Wick ham Street where a building of 10,000m² has development approval. The next stage of the Coronation Drive Office Park also has a similar timing, where a 16,585m² building has approval and tenant commitments are expected to be announced shortly. Further out, there is a 12, 000m² proposals for three commercial buildings at 56 Edmonton Street, Bowen Hills.
Adding together the projects proposed, a total of 140,880m² may enter the Near City prior to the end of 2008. Apart from six buildings over 10,000m² the remainder of this office space is within smaller buildings which will only proceed subject to pre-commitment. His may spread the delivery of these projects over a longer period, however at the moment the appetite for office accommodation over the next two and a half years sees much of this space under consideration by tenants.
Net absorption of office space within the Brisbane near City markets has been largely above trend levels over the past two years as the increased demand in the CBD and general office market also had an impact on the Near City. While this was below the previous year’s figure of 66,732m² this reflected sustained absorption, in a climate of very little space available, as discussed below.
With forecasts painting a picture of sustained economic growth, the expectation for net absorption rates across the Brisbane office markets remains positive. Based on external forecasts of white collar employment growth, we are anticipating average annual net absorption within the Brisbane Near City to be just over 34, 000m² for the next three years. This level is supported by the expectation that some larger CBD tenants will relocate to new developments in the Near City precincts during 2007 and into 2008.
The vacancy rate within the Near City, similar to the CBD, is at historically low levels, recording 4.2% as at the July 2006 PCA survey. “A grade” accommodation has all but disappeared with 0.8% vacancy as at the PCA survey in July 2006. This is reflective of tenants from the CBD moving to the fringes, but expecting a high quality of accommodation in return for any perceived compromises made on staff amenity. In terms of the precincts, Spring Hill with 2.3% (also a beneficiary of the CBD market tightness), Toowoon with 3.2% and the Inner South with 3.6% are tightest Near City markets.
The Milton market at 4.1%, although not the tightest market at the moment, is the precinct with the greatest recent improvement, down from a 7% vacancy in January 2006 and showing speedy recovery from a recent high of 16.2% in January 2004. As the Latin American economies mature, foreign capital investment will increase, requiring further development of infrastructure, and in turn making investment in industrial real estate more attractive. Based on Knight Frank expectations of demand and supply, the Near City vacancy rate is expected to continue at similar levels, until mid-2007 when new supply is available to the market in any great quantum.Rental rates within the Near City markets have shown accelerated growth over the past 18 months to the point where average prime gross effective rents are $378/m². This represents an annual growth rate of 20%, on the back of the previous year’s 8.6%. While the growth rate was lower than that seen in the CBD, it still reflects a remarkable turnaround in market fortunes.
Our expectation is that the average rents will continue to grow, albeit at a reduced rate, largely drawn upwards by rentals achieved in the new construction and a realignment of the traditional ratio between CBD and Near City rents. Expectations are for average annual rental growth over the next three years of 4.6% per annum.
Demand for commercial Near City investments has been strong over the past two years, however with high transaction levels during the prior years there have been limited purchasing opportunities to date in 2006. Among the recent major transactions are the development-opportunity linked sale of 100 Wickham Street (where an additional tower of 10,000m² may be constructed) and the reported purchase of the under-construction, development at 199 Grey St, by a private investor.
This demand from purchasers, coupled with the tight rental market and associated rental growth has seen further tightening of yields in the Near City precincts. Current median prime yields for the Near City market is 7.3% with a yield range of 7.0% - 7.6%. In common with many investment markets the yield band is very tight, with assets being priced by the market in a very similar manner, reflecting the overall confidence in the market.
The appetite for investment product has also seen the yield for the Near City areas increasingly mirror those for the CBD. The yield differential between prime Near City and prime CBD properties is currently 30 basis points (7.0% compared with 7. 3%), by comparison just over five years ago in early 2001, this was 125bps (8.1% against 9.35%).
This reflects a re-weighting by the market of the risk factors associated with the Near City office markets, as the non-CBD office markets have matured and gained permanent tenant acceptance, and is not unique to the Brisbane market.
The Near City market has been performing exceptionally well with strong rental growth and falling median yields enhancing investors’ total returns property inspections and prepare conveyancing report. The Near City precincts are expected to maintain their strong performance, with sustained low vacancy levels, through to mid-2007 when the quantum of new supply begins to bring some liquidity to the market.
Following rental growth of some 20% during the past 12 months, the Near City is expected to see further, although slowing, rental growth over the coming three years. On average this rental growth will be in the order of 4.6% per annum.
The Lower North Shore strata market comprises 182,400 sq m of office stock across three precincts and equates to 46% of the Sydney CBD strata market. A vast majority of strata stock located on the Lower North Shore is of B and C grade quality. The market has experienced strong growth in size over the past three years, expanding by 11% (18,800 sq m), compared to its free hold counterpart, which has declined 4% due to redevelopment and conversions, predominately to residential use.
Strata office vacancy on the Lower North Shore declined during 2006 and continued to trend below freehold vacancy rates. Strata vacancy was 7.6% as at January 2007, down from 9.5% from 12 months ago. followed by a positive 14,482 sq m in the second half, to bring the total absorption for 2006 to 11,441 sq m. Demand was considerably stronger than experienced in 2005 when just 1,939 sq m of space was taken up.
It has become a tough task to manage the property transaction process because the process is totally merged with legal and complicated steps which re not easy to deal. Conveyancing Brisbane will help you to solve your problem and find a way towards success in the property transaction process to complete the property transaction process performed by expert conveyancers.
Rental growth was experienced across all three North Shore strata precincts, however was strongest in the North Sydney market. Subdued investor demand during 2006 resulted in yields holding steady over the last 12 months, mainly to due to three interest rate increases during 2006.
The North Sydney strata market comprises 83,980 sq m of stock across 26 buildings. This represents 46% of the Lower North Shore strata office stock and is equivalent to 21% of the Sydney CBD strata market. A majority of this stock is B grade (64%) and C grade (33%) and accounts for 10% of the total North Sydney office market. The average size of a strata development in North Sydney is 3,200 sq m.
The North Sydney strata market ha s increased in size by 2.9% over the past three years, this compared to its freehold counterpart, who has experienced a decline in size due to the redevelopment of commercial space, predominately to residential. This growth in stock has been driven by two factors:New mixed developments entering the market typically have a small commercial strata component, which has increased stock levels at a slow but steady rate.
The nature of strata titles (multiple owners as oppose d to freehold) makes the task of redevelopment of such properties a difficult and costly exercise.The market has seen various mixed developments with a small commercial strata component enter the market over the past 10 year s, however only four strata developments of significance been completed during this period.
The most recent completion was 75 Miller Street, purchased by Lend Lease in 2005, which was sub-divided in 2006, however weak demand led to the strata suites being withdrawn from sale. Prior to this, Milsons Landing at 6A Glen Street was completed in 2004 comprising an NLA of 5,000 sq m across 45 strata offices and the Blade at 71 Walker Street, completed in 2003 comprising an NLA of 1,800 sq m across 20 commercial suites.
The only strata development of significance currently in the pipeline is the Luna Park site at Milsons Point, which is still in early planning stages for 2,350 sq m of strata space.Build-to-suits are the norm due to lack of modern industrial product. Outside of Mexico, there is a low supply of speculative buildings, making overbuilding unlikely.
North Sydney’s strata vacancy rate decreased from 10.7% in July 2006 to 7.1% in January 2007 (Property Council of Australia). This represents a strong decrease of 360 basis points and has brought strata vacancies back below the freehold vacancy of 7.4% for the first time since January 2005 and is below Sydney CBD strata vacancy of 7.7%.The strata leasing market picked up in the second half of 20 06 with net absorption for the 6 month period at 8,423 sq m. This was offset by a weak start to the year, with negative -733 sq m, bringing the annual net absorption to 7, 690 sq m. This take up of space followed weak demand (-6,981 sq m) in 2005.
2006 saw some investor demand return to the market with $35.34 million exchanged across 69 strata office suites with an average size of 110 sq m and value of $4,685/sq m (up 3% from 2005). However, sales volume has not reached the levels of the booms years of 2002 and 2003 which collectively accounted for $101.77 million of sales (see figure 5), driven by new supply entering the market an d investor demand on the back of strong capital growth, sales activity has been subdued from 2004 since the completion of the Blade in 2003 and pre-sales of Milsons Landing.
As the largest strata market on the Lower North Shore, North Sydney accounted for 48% of strata office sales transacted in the region during 2006. Private investors and owner occupiers remain the primary participants in the strata office market. Competition from alternative asset classes, such as tax effective superannuation and high yielding equities with the benefit of liquidity and minimal purchase costs.The service of property valuers reduced affordability of strata assets following years of strong capital growth.
The meaning of word conveyancing is said as changing the title of property from one authorized person to another one. It is conducted if someone is in need to buy a property or sell a property. The services given by conveyancing Sydney has reliability and effect of making the successful completion of the property transaction process. The process includes some complicated steps to perform but working under the guidance of conveyancer will let remove your all problems that you may face during the process.
North Sydney freehold stock enjoyed solid investor demand from institutions, driving yields down in 2006, with prime yields breaking the sub 7.00% barrier. However, relatively softer investor demand in the strata market led yields to remain static during 2006, with yields continuing to average 7.00% to 7.50%. Reduced investor demand was contributed.
The fact of increasing the value of property is increasing rapidly and because of those valuers has come in demand to manage the whole process of property valuation. But the service provided by property valuers of Brisbane is most beneficial and usable to make your process complete with huge amount of profit. And this will make your property to increase its price and as well as after that you will be able to make decision on your property.
No new supply entering the market since the completion of the Blade in 2003 and Milsons Landing in 2004 (pre-sales 2002 and 2003). A mixed outlook amongst private investors for the North Sydney market following high vacancy rates and modest rental growth.
However, this slow down in investor demand has create d opportunities, allowing savvy investors the opportunity to achieve yields greater than 7.50% Crow’s Nest / St Leonard’s is the second largest strata market on the Lower North Shore, comprising 54,600 sq m of stock across 29 buildings.This represents 28% of the Lower North Shore strata office stock and equates to 14% of the Sydney CBD strata market. Like North Sydney, Crow’s Nest / St Leonard’s strata stock is made up of a mix of B, C and D grade buildings. The average size of a strata development in the precinct is 1,700 sq m.
The Crows Nest / St Leonard’s strata market has experienced significant growth in size during recent times, increasing 35% over the past three years. , declining in size by 10% over the same period due to redevelopment of commercial space, predominately to mixed-use residential. His ha s resulted in a lower level of freehold stock in the market (the stock demolished or re-developed to mixed-use) and has increased the supply of strata commercial space, which typically comprised the ground and lower levels within new developments.
The most recently completed strata subdivision is 156 Pacific Highway comprising 3,400 sq m across 27 suites. There are currently no significant strata projects in the pipeline, however, two small scale mixed-use developments are at early stages of the development cycle.The vacancy rate in the Crows Nest / St Leonard’s strata market increased from 8.7% in July 2006 to 10.1% in January 2007 (Property Council of Australia), however continues to trend below the freehold vacancy of 11.3%.
The strata leasing market was steady 2006 with net absorption for the 12 month period of 2,595 sq m, albeit down from 2005 (6,121 sq m). However, this demand was not sufficient to meet the 3,800 sq m of new supply entering the market, leading to the increase in strata vacancy.In the 12 months to March 2007, gross effective rents for strata space experienced modest growth to range from $230/sq m to $300/sq m. Incentive levels continue to average 25%.
Sales volume in 2006 was down 53% from 2005 levels, with only $20.93 million changing hands across 49 strata suite sales. This equated to 4,500 sq m of strata space and accounted for 28% of strata sales transacted in the region. Suite sizes transacted averaged 122 sq m in size and $565,500 in value. This depressed sale s volume in 2006 was a result of limited new stock entering the market during the year and a softening in investor demand. Chats wood, the smallest of the Lower North Shore strata markets, consists of 47,000 sq m across 15 buildings, with an average size of 3,000 sq m.
There are currently no strata developments in the pipeline and the only mixed-use development of significance is 63A Archer Street, which on completion will have 2,600 sq m of commercial space. But it has been more volatile over the past three year s, mainly due to the size of the market. The strata vacancy rate decreased by 340 basis points from 10.2% in July 2006 to 6.8% in January 2007 (Property Council of Australia) and continues to trend below freehold vacancy. The strata leasing market picked up in the second half of 20 06 with net absorption for the 6 month period at 5,465 sq m. This was offset by a weak start to the year, with negative - 4,309 sq m, bringing the annual net absorption to 1,156 sq m.
Sales volume in 2006 was down 51% from 2005 levels, with only $17.18 million changing hands across 29 strata suites, representing 23% of strata sales transactions recorded for the Lower North Shore market. Suites transacted averaged 126 sq m in size and $592,500 in value. The highest sale for the market was Australian Pharmaceutical Publishing Company’s purchase of a 402 sq m suite at 8 Thomas Street for $1.85 million.
He depressed sales volume in 2006 was a result of limited new stock entering the market during the year and reduced investor demand. Yields in the Chats wood strata market remained static during 2006 continuing to range between 7.75 % to 8.50 %.White Collar Employment growth on the North Shore is forecast to average 1.1% per annum (644 people per annum) for the next five years, exceeding the 10 year historical average of 0.7% per annum.
Strata vacancy (7.9%) on the Lower North Shore continues to trend below freehold vacancy (10.2%), with a divergence of 230 basis points at January 2007.Private investors continue to dominate ownership of the strata office market on the Lower North Shore, followed by owner occupiers. registered property valuer is Unlike the freehold market where vacant assets may be viewed as an opportunity or value- add purchase, vacant strata suites are in lower demand than occupied stock. Therefore, whilst vacant strata suites are appealing to owner occupiers, they are not as desirable to private investors who factor lease up costs into purchase prices. finance.
For calculating the price of the property it has become a compulsory process to find a property valuer. A property valuer will always provide you with quality services to deal with your process. To complete the process it requires facing many steps in between the process of property valuation. But as the valuer is knowledgeable it is not a hard task for him to complete the process and calculates an idea about the price of your house. The steps that come in between the property valuation process are like managing legal paper work which is important I n he process and inspecting the property to find its value. This way you can make your house more usable and beneficial to use.
There are no major strata office projects currently under construction (excluding mixed developments). However, 100 Mount Street and 75 Miller Street both have development approval for subdivision, ye t remain in sole ownership following unsuccessful sale campaigns. Combined these two buildings comprise 8,000 sq m of strata stock that could be offered to the market. The Chats wood to Epping rail link due for completion in 2008 and the redevelopment of the transport interchange to be completed late this year, are both good news for the Chats wood market. Both will boost the appeal of the market to tenants and investors alike.
The Chats wood market has also declined in size, but at a much slower rate to that experienced by North Sydney. property valuation reports market has decreased 2.3% since its peak of 305,883 sq m in January 1998. Like North Sydney, developer activity in the market has moved towards residential development as opposed to commercial due to challenging fundamentals in the office sector and proximity to Sydney CBD. The Crows Nest / St Leonard’s market has bucked this trend, increasing 22.7% in size over the past 10 years, albeit off a relatively low base. To place this in perspective, the Sydney CBD market increased 26.0% over the same period.
As a fringe market the North Shore has benefited from improving conditions in the Sydney CBD, in particular, increasing rents and declining vacancies on the back of strong demand. However, competition from competing fringe markets such as Piermont, Ultimo and Macquarie Park will continue, placing a cap on the spillover effect. Evidence of the flow-on effect from improving conditions in the Sydney CBD, combined with growth in white collar employment (WCE) in North Sydney, has been evidenced via reductions in incentives levels, increasing effective rents and reduces d vacancies across the North Shore.
According to the Property Council of Australia, vacancy rate s continued to decline on the North Shore during 2006, posting its fourth consecutive decrease. Total vacancy was down from its peak of 14.1% in January 2005 to 9.9% in January 2007, and down 130 basis points from 12 months ago (see figure 3).All grades on the North Shore experienced decreases in vacancy over the six months to January 2007, with the exception of A grade, whose stellar performance was halted, posting an increase of 140 basis points to 8.7% (able it still down from 14.6% in January 2005).
His rise in A grade vacancy in the second half of 2006 was a result of 22,860 sq m entering the market, boosting A grade stock by 8.8% and representing the highest level of new supply since July 2001. North Sydney accommodated a majority of this new stock, pushing its prime vacancy rate (10.8%) above its secondary vacancy rate (8.1%). This is a reverse situation from the other two North Shore markets, where prime vacancy is significantly lower than secondary.
The calculate property tax and stamp duty amounts, Growth in WCE is to encounter a setback with the departure of Optus from the North Shore market this year. Access Economics anticipates negative growth of -0.7% in WCE during 2007. However, this sharp reduction in the size of the communications sector will be offset by growth in the public administration and property and business services sectors. WCE growth is forecast to average 1.1% per annum (644 people per annum) for the next five years, exceeding the 10 year historical average of 0.7% per annum.
Prime and secondary grades in all North Shore markets recorded positive net absorption in the six months to January 2007, with the exception of secondary stock in Chats wood, which experienced negative net absorption of -2,435 sq m.
Following the lead of the Sydney CBD office market, the North Shore experienced yield compression and rental growth across the board, indicative of its ongoing recovery from the ‘dot.com’ doldrums. During 2006, North Sydney was the biggest winner on the North Shore, with prime space incentives down an average of 5% and gross effective rental growth of 10.54% for the year. Yields tightened during 2006, breaking the sub 7.00% barrier to an average of 6.75% for prime assets
Melbourne property valuers are the persons who are fully involved to inspect the property in brief and they do so to find the approximate value of your house which is compared with the real estate houses which are just sold. This is the main step to inspect the house and note down its basic and common points which according to property valuers are necessary to pay attention on them. This is the most basic step and after that it has been recommended that always consult with a Melbourne property value to avoid any type of loss and face only profitable services which will lead to get your house price.
Crow’s Nest followed close behind with incentives down 4%, gross effective rents up 8.19% and prime yields down to average of 7.25%, while Chats wood also benefited, but at a more subdued rate. The strategically well-positioned countries of Central and Eastern Europe have enjoyed an increase in demand for high specification logistics facilities as they have been amalgamated into the EU.
Chats wood markets achieving market yields of 7.00%. Investor demand was strong on the North Shore during 2006, with sales volume (above $10 million) up 143% from 2005, with a total of $838.98 million exchanging hands across 17 transactions.And compensation valuations North Sydney, the largest North Shore market, accounted for the highest portion of sales (57%). At January 2007, listed property trusts (LPTs) dominate d the North Shore scene, owning 29% of the market, with the highest ownership ratio in North Sydney. Private investors were also prevalent, owning 28% of office assets on the North Shore.