The demand for office space in Australian capital cities has surged to a 10-year high.
In the second quarter of 2018 the latest Colliers International Office Demand Index recorded inquiries for 783,000 square metres of office space in the capital cities.
The Colliers index is a credible indicator of the future take-up of office space and this figure was a 25 per cent jump from the first quarter of the year.
Demand for office space is more than 10 per cent higher for the first half of 2018 than it was for the first half of 2017, and Simon Hunt from Colliers International spoke to the Australian Financial Review about the figures.
“We have seen an uplift in demand in major office markets across the country in the first half of 2018, including Sydney, Melbourne, Brisbane and Perth,” he said.
The biggest rise in demand was indeed the two biggest markets of Melbourne and Sydney which both have been travelling at record low vacancy rates.
So where is the demand for offices coming from?
According to the Colliers index the government was the main driver in the office tenant market nationally, followed by business services, finance and IT.
“Sustained business confidence has resulted in a general growth trend across most industry sectors,” Collier International’s Luke Dutton told AFR.
“Notwithstanding this, tenants are seeking out more efficient use of space to offset rising costs.”