The prospect of engaging in an office space business within Sydney’s central business district has become more attractive with record-low vacancy rates.
Since the demand for office properties in the city remains strong, many landlords have looked into alternative ways on how to maximise the increased interest. Coworking spaces offered by office space businesses have been the answer to this, notes Venture X.
Low Vacancy Rates
A Property Council of Australia’s report showed that the vacancies between January and June in the central business district fell to 4.6%, which is a record low in more than a decade. The Office Market Report noted that the trend also happens in other capital cities in Australia.
This means that opening a coworking space business isn’t only possible in Sydney. As of July, the vacancy rate for class D offices was the lowest at 1.9%, followed by class C properties at 3.2%. Premium and class B properties each had a vacancy rate of 5.1%, while class A offices recorded a 4.6% vacancy.
While a tighter vacancy rate in the central business district means a strong demand, the price of rentals is high. This led many companies to seek other places, particularly in North Sydney. White-collar jobs drive demand for offices in this area such as professionals from education, IT and technology industries, according to Shrabastee Mallik of Savills.
Mallik said that vacancy rates would continue to drop until early next year when new office projects are expected to be delivered by then. The trend indicates that coworking spaces will remain popular among tenants, while Property Council NSW’s Jane Fitzgerald said that more than 130,000 square metres of new space would be ready starting from 2019.
Start-up companies and small businesses are among the biggest markets for shared office spaces. If you’re looking to buy an office space business, consider some franchising business models that focus on this type of ventures.