DWINDLING SUPPLY WILL DRIVE PREMIUM CBD RENTS
Sydney faces a shortage of new premium office developments, with Knight Frank research forecasting rental growth of 5% per year as demand outstrips supply.
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Sydney’s CBD is heading into a period of historically low new office supply, with just three major premium developments over 25,000 square metres due by 2029, according to new Knight Frank research.
Of the 163,000 square metres set to be delivered, 65 per cent is already pre-committed, leaving only one per cent of total CBD stock available for lease until 2027. No new projects are currently slated for 2028-29.
Knight Frank Associate Director, Research & Consulting, Marco Mascitelli, said premium-grade space continued to outperform the wider market.
“Since 2018 there has been an average pre-practical completion commitment rate of 87% across all new developments, which have totalled 481,000 across 13 schemes,” Mascitelli said.
“Over the past 18 months, 170,000 square metres of newly developed premium grade office space has been delivered…all have been successfully leased, achieving an average commitment rate of 90%.”
National Head of Leasing Andrea Roberts said the market was tightening rapidly.
“Tenants continue to prioritise centrally located assets with market-leading amenity, and in time this will expose a supply shortfall at the top end of market which will drive rapid rental growth,” she said.
“As a result of the looming supply shortfall, occupiers seeking premium space within the 2026 to 2028 window need to act swiftly to secure their preferred option.”
Knight Frank forecasts average rental growth of around five per cent a year for Sydney’s premium assets, with incentive levels expected to fall below those offered across the wider market.
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The 7,145-square-foot apartment, with European-inspired interiors, hasn’t traded hands since it was built in 2008.
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A Denver condo that hit the market earlier this week for $16 million is now the Mile High City’s most expensive listing.
The new listing by far beats the next-priciest home for sale, a condo in a new development that was put on the market at the beginning of the year for about $9.79 million.
The city’s most expensive single-family home is asking just shy of $9 million—the metro area’s priciest single-family homes tend to be in the Cherry Hills Village suburb.
At 7,145 square feet, the newly listed unit is nearly double the size of the one in the new development and more on par with the size of some of Denver’s most expensive single-family homes.
It’s on the top floor of a seven-story mixed-use building that was built in 2008 in the Cherry Creek neighbourhood, one of the most affluent areas of the city.
The last time the three-bedroom apartment sold was before it was even completed, though it’s been owned under a few different LLCs and trusts.
The seller, who Mansion Global wasn’t able to identify, bought the condo from the developer in September 2007 for $4.047 million, records show.
The design of the interiors is European-inspired, with decorative columns, elaborate millwork and ornate built-ins.
Plus, there’s a mahogany-clad study, a formal dining room that seats up to 30 guests and views of mountains and Denver Country Club’s golf course.
A private terrace adds 1,230 square feet of outdoor living space and features a fireplace and a built-in barbecue, according to the listing with Josh Behr of LIV Sotheby’s International Realty.
A representative for Behr didn’t respond to a request for comment.
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