Spotlight on tenants in Australian city markets

JLL’s new research report, Tenant Trends, has found that there are different opportunities for tenants seeking space, depending on where they are located in Australia.

July 05, 2018

JLL’s new research report, Tenant Trends, has found that there are different opportunities for tenants seeking space, depending on where they are located in Australia. 

While opportunities vary from state to state, tenants with the right strategy will be able to capitalise on the current market conditions. 

  • Perth is moving to an economic recovery, and tenants should organise their future property needs now.
  • Vacancy is at a five-year low in Brisbane, but landlords are offering flexibility to preserve face rents. Tenants should choose this time to upgrade. 
  • Adelaide lacks supply, but with incentives at 40 percent, it is also very much a market for tenants. 
  • Canberra has emerged as a two-tier market, with balanced opportunities for landlords and tenants in the Premium A-Grade space, while the secondary market favours the tenant. 
  • At the other end of the spectrum, Sydney and Melbourne have the tightest vacancy in Australia, as well as the biggest demand. Occupiers should start looking for new accommodation at least three years ahead of moving. 

JLL’s Head of Tenant Representation – Australia, Michael Greene said, “Across the country, we are seeing tenants getting more active in the market. In Sydney and Melbourne, this is being driven by growth in response to favourable economic conditions. 

“In the rest of the nation, tenants are taking advantage of favourable market conditions to upgrade to a better building and have their fit out funded from the incentive.”

Tenants are leveraging the opportunity to create a new office environment to better reflect the new ways of working and to use their space more efficiently. 

Office space now needs to deal with a number of trends:

  • Office space needs to be an attractor for an increasingly mobile workforce that will be expected to be innovative, using the workplace as an incubator for new ideas.
  • Workspace must be able to deal with staff working flexibly, and space must be adaptive to deal with changes in the organisation.
  • As we can all work anywhere at any time, it is important that the office is people oriented and personalised so that people want to come in and feel part of the organisation. This enables the creation of a community within the workplace.

“We are now seeing the first examples of organisations leasing a core amount of space, but dealing with the need to be flexible through the use of co-working space to manage peaks and troughs in demand. We expect this trend to continue,” Mr Greene said.