Office vacancies climbing
Slowing white-collar employment and new developments has led to a rise in vacant office space across the country into double digits, at a time of heightened corporate activity among landlords.
Vacancies are forecast to rise further in the next 12 months.
The rise comes as potential buyers circle the Commonwealth Bank's listed office trust, Commonwealth Office Property Fund. If successful, buyers, such as DEXUS, with 14.9 per cent of the fund, could look to sell office towers.
According to the Property Council of Australia's Office Market Report for the six months to June 30, the national vacancy rate was 10.1 per cent, with Sydney at 8.9 per cent and Melbourne at 9.8 per cent.
The vacancy rates are at the highest mark for at least a decade.
The Property Council's NSW executive director, Glenn Byres, said the vacancy rate for the Sydney CBD rose from 7.2 to 8.9 per cent in the six months to July, with all building grades posting increases.
CBRE forecasts set vacancies to peak in most CBD markets in 2015-16, with Brisbane to have the peak vacancy of about 14 per cent.
CBRE's head of research for Australia, Stephen McNabb, said the latest Property Council statistics highlighted that demand had softened across all CBD markets.