In H1 2022, the CBD office market continued to witness a consistent fall in vacancy, driven mainly by an active Secondary office submarket, which saw over 9,000 sqm being occupied.
The Premium CBD office submarket remained very tight. We expect that this submarket will continue to remain resilient due to very low vacancy in existing buildings and high pre-commitment levels to new builds.
Industrial rents saw strong growth during Q2 2022 for both the Prime and Secondary submarkets. This was driven by face rents with incentives remaining stable at their already low levels.
The inflationary hedge nature of property is starting to come into play, with favourable supply and demand dynamics, higher construction costs and CPI based lease and rent review mechanism contributing to healthy rent growth.
While inflationary pressures and higher interest rates continue to soften market yields across most sectors, we are also seeing signs of ‘normalisation’ in the market with the interest rate curve, and growing activity from market-aligned buyers, and more importantly sellers.