Commercial Sale Activity in the Sydney CBD Declines Due to Smaller Available Offices

The Sydney CBD Cityscope region encompasses areas around Darling Harbour from Barangaroo and Circular Quay, down to Regent Street in Ultimo. Sales activity was notably subdued in the May 2017 quarter, particularly in the office buildings and commercial units. The exception was in the retail unit segment.

The year to May 2017 saw a significant decline in the value of commercial property sold, while the volume of transactions remained fairly consistent, dropping just 6% over the year.

The combined value of commercial sales in the Sydney Cityscope region fell 44% to $4.9 billion in the year to May. Commercial building sales contributed 93% to the decline, totalling just $3 billion as opposed to $6.5 billion in the year to May 2016.

However, the decline in combined sales volume does not necessarily signal a lack of demand in Sydney’s CBD. On the contrary, the average price per square metre of office space increased by a significant 23%, to $9,100 per square metre. This suggests that the reason for the decline in the value of sales is that the size of offices transacting over 2017 were smaller than in the previous year. This is reaffirmed by the volume of sales, which was steady on the previous year at 359 sales.

While most types of commercial transactions were steady year-on-year, sales in whole retail buildings increased to 17, up from 6 in the previous year. The combined sales value of retail buildings in the year to May was $690 million.

Sales in individual retail stores in the Sydney CBD was steady on the previous year, at 25.  Sales averaged approximately $19 million per quarter in the year to May. The May quarter itself saw a re-bound of $28 million in this space.

Aside from retail stores, the May quarter displayed weak performance relative to the three months to February, and showed a relatively distinct decline in sales volumes from previous quarters.

 

Eliza Owen
Commercial Research Analyst



Subscribe to the free Commercial Pulse eNewsletter
Get the latest commercial news and sales data each week from our CoreLogic Commercial Pulse! Click here to subscribe

About Commercial Research

CoreLogic RP Data Commercial Cityscope is a web-based service. Access is sold by geographic regions (Cityscope areas). There are 25 geographic regions across Australia (three in New Zealand), clustered around the cities of Sydney, Melbourne, Brisbane, Adelaide, Perth, Canberra and Newcastle. Darwin and Hobart CBD centres aren’t covered. Cityscope Areas in NSW and QLD also include lease expiry data for the most complete commercial coverage available. For more information call 1300 734 318.

Connect with CoreLogic

Enter your email address to subscribe to our e-newsletter, and have new posts delivered via email. You can also connect with CoreLogic on social media.

Trackbacks/Pingbacks

  1. Commercial Sale Activity in the Sydney CBD Declines Due to Smaller Available Offices | RealEtateBuzz - June 22, 2017

    […] View article: Commercial Sale Activity in the Sydney CBD Declines Due to Smaller Available Offices […]

Leave a Reply

Notify me of followup comments via e-mail. You can also subscribe without commenting.