2018: The Year That Was. 2019: The Year That Will Be
A shortage of stock and continued demand in the strata markets, particularly for strata office in the Melbourne CBD, is expected to fuel an increase in values and strong competition for assets in 2019. The owner-occupier buyer profile continues to dominate and outbid investors as businesses look to take advantage of the low interest rate environment and to avoid the ever-increasing rental rates in the CBD as a result of the low 3.1% office vacancy rate. In 2018, strata office sales over $1 million within the Melbourne CBD totalled $86.5 million, a decline from last year with $111.5 million indicating the limited supply. With no new confirmed strata office developments, we see this trend to continue.
2018 Strata Market Key Information
- Total volume of strata office sales was $86million +
- 33 strata office deals
- $8,200/m² average capital value
- 5.18% average yield
- 351m² average strata office size
Take Away Points for 2019:
- Total strata office vacancy at low 3.1%
- Net effective rents to continue to increase
- No confirmed strata office supply & pent up demand
To request an annual market commentary report for 2018, please contact Chris Ling, Anthony Kirwan or Martin Leong as the Colliers International strata office experts.