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Australia’s commercial real estate market is flourishing as major technology companies move to establish a presence in this key market, reported Reuters.
In fact, JLL revealed that gross rents in Sydney have increased by nearly 25 percent in the year to September, as LinkedIn, Expedia and Amazon sought to expand into Sydney’s central business district (CBD).
Vacancy level in the city has also declined to a near-decade low as the finance sector’s former stronghold, Martin Place, is now called ‘Silicon Place’ by the locals.
“The global economy is on an upswing and you’ve got a geographically constrained market in Sydney. I’d call it a perfect storm,” said Charter Hall Office Trust’s Office Property Portfolio Manager, Trent James.
Notably, Amazon has purchased a nine-floor office in the city’s financial hub, with breath-taking views of Sydney Harbour Bridge and Hyde Park, while cloud computing firm LogMeIn has occupied two floors in a building in Martin Place that also houses Tesla’s showroom and new headquarters for Asia Pacific.
“Sydney and Australia are very similar to the United States in terms of technology adoption, growth and maturity. It’s a nice gateway to Asia,” noted LogMeIn’s Vice President for Asia Pacific, Lindsay Brown.
In addition, Google and Facebook are among the existing residents of Martin Place, while major financial institutions have relocated to other areas in the central business district.
As new companies enter the market and existing tenants expand, several old buildings in Sydney have been torn down to make way for high-tech premises. However, the supply of available office space is expected to remain limited as new stock is forecasted to be completed prior to 2020.
As such, Australia’s two largest cities, Melbourne and Sydney, are both witnessing many enquiries for offices, likewise for other business hubs such as Perth, added JLL.
This article was edited by Keshia Faculin.
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