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      How to Rent an Office in the Sydney CBD

      A look at the Sydney Commercial real estate market

      The Sydney CBD is Australia’s largest commercial real estate market. Renting an office space in the Sydney CBD places your business in the epicentre of one of the Asia Pacific region’s major financial and commercial hubs. The area which extends from Circular Quay back to Golburn Street, 3kms to the south, is comprised of six separate precincts. Starting at Circular Quay and moving clockwise they are CBD Core, Mid-town, Southern CBD, Western Corridor, Barangaroo and The Rocks.  

      With fabulous water views the CBD Core is home to prestigious global investment banks whilst Martin Place is experiencing a tech boom. Legal firms congregate in the Mid town precinct and Barangaroo is set to become a mecca for the financial services industry.  

      Whilst the Sydney CBD is still dominated by traditional banking, financial services, legal firms and the government sector, the burgeoning IT industry is rapidly increasing its foothold.  

      The Sydney CBD office market is currently in a state of flux. Rental vacancies have fallen in recent months and property analysts expect supply to remain tight over the next few years despite major new developments opening up in Barangaroo. Net rental rates in the Sydney CBD are currently in the ball park of;
       ·       A Grade Buildings - $600 to $900 per square metre per annum
      ·       Secondary Grade Buildings - $450 to $600 per square metre per annum[1]

       Property professionals point to a modest uptick in rental rates due to supply side constraints.

      At the same time the demand profile for commercial real estate is changing. Typically tenants are looking for spaces between 1,200 sqm and 2,000 sqm. However there has been a notable trend towards smaller offices and shorter leases.[2]
       
      Emerging IT and business services companies require smaller more nimble spaces compared with the entrenched banking and legal sector. The new guard are also looking for a different type of office environment in order to attract and retain the best talent. Issues such as work/life balance and building sustainability are of increasing importance to the next generation of CBD tenants. These businesses are looking for facilities like bike racks and showers, natural lighting, outdoor areas and green spaces as well as contemporary fit outs. Consequently leases under 300 sqm in buildings with great facilities are hot right now. Landlords are responding by subdividing larger vacancies and refurbishing lower grade buildings in order to attract the creative industries. Co-working arrangements and serviced offices are taking off in a big way in the Sydney CBD, reflecting overseas trends.  

      [1] Savills – Briefing Sydney CBD Office – July 2015, P6.
      [2] Colliers International, CBD Office – Second Half 2015 – New Breed of Tenants, P13
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