Investa Commercial Property Fund (ICPF or the ‘Fund’) this week announced it has finalised over 95,000 square metres of office leasing over the last year achieving a 97% occupancy and a WALE of 5.1 years as of the 30th June.
In Sydney, ICPF leased over 72,800 square metres during the year, including a lease renewal of 8,700 square metres to Deutsche Bank at Deutsche Bank Place, 126 Phillip Street, Sydney, 3,500 square metres to a life insurance firm at 40 Mount Street, North Sydney and 4,400 square metres to leading flexible workspace provider; IWG’s Spaces brand at ICPF’s new, Premium development at 60 Martin Place Sydney which completes in September.
In Melbourne, ICPF finalised over 9,600 square metres of leasing, with Premium asset 120 Collins Street, Melbourne the stand-out, with 19 leases transacted. 120 Collins Street has capitalised on historically low vacancy levels and strong demand for prime office accommodation especially in the desirable East End precinct, as the building nears 100% occupancy. In Brisbane, a new lease was signed at 259 Queen Street over 4,500 square metres. Finally, at QV1 in Perth two existing tenants signed lease renewals totalling circa 6,800 square metres.
Jason Leong, Fund Manager, ICPF said: “Australia’s major capital cities continue to outperform, with vacancy in the Sydney and Melbourne markets near 10-year lows and, specific to Sydney, there is very limited new office supply on the horizon.
The strong leasing performance reflects yet another year of solid tenant demand across the portfolio from both new and existing tenants, off the back of market leading service by our national Real Estate Services teams, demonstrating the benefits of our vertically integrated platform.”
David Cannington, Head of Research and Strategy, Investa said: “Looking ahead, we expect that the recent strength in office demand will moderate on softer economic conditions. However, office market vacancy in both Sydney and Melbourne will stay low and high-quality prime office space will remain the preferred option of CBD office market tenants.
Both pre-commitment of office projects currently under construction and continued prime market rental growth are positive indicators of a strong preference for high quality office.”
“These new leasing transactions at 120 Collins were a result of the high level of building and surrounding amenity coupled by accommodation quality and building services” said Ben Christie and Milly Stockdale from Colliers International.