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.