News & Discussion: CBD Real Estate & Market Conditions

[crawf]

Sounds very promising, thanks Urban

[Ben]

From the Messenger:

City development boom set for reality check

Chris Day

08Apr08

ADELAIDE city's recent development boom is due for a "reality check" with only a couple of major office towers likely to be built, a leading property figure says.

While the City Council dealt with $1 billion worth of new development applications last year, mostly for new offices, the demand to tenant these buildings may not be there.

"There is a significant amount of space proposed but let's have a reality check," Don Crouch, managing director of commercial property agent Knight Frank, said.

He said office developers were chasing the same tenants and he believed there would be "a huge over supply in three years" if too much new office space was built, putting downward pressure on rents.

"The council is flying around saying we've had X amount of applications but until they get built, it doesn't mean a thing.

"There are a lot of sites around and each has its merit, but in today's climate they won't commence without a good pre-commitment (from tenants).

"We will only see one or two of them go ahead in the short-term and that's the way it should be."

Lord Mayor Michael Harbison rejected Mr Crouch's view: "If you ask businesses, their biggest concern for the future is a lack of office space."

The Adelaide Core Zone - bounded by Morphett St, North Tce, Pulteney St and Wakefield St - had a 4.3 per cent office vacancy rate in January, according to the Property Council's annual Office Market Report.

It was the lowest vacancy rate since records began in 1990 and a drop of 2 per cent compared with January 2006.

[UrbanSG]

I sort of agree with both sides here. I don't like the way the ACC goes around talking up $1 billion worth of development applications because until they actually get built and a few if not more won't then it doesn't really mean all that much. Plus the way they add some of the figures and double up on the same but amended applications provides an inflated figure.

At the same time the office vacany rates are now histroically low and there are major tenant requirements out there as demonstrated in the afr article yesterday. I agree that only a few will probably get built in the near term and that is better than all at once with an 80's-style office space crash wating in the wings. I don't want to wait 10+ years for another new office tower again.

[Howie]

I'd like to see some incentives to get some of the companies from the northern suburbs (e.g. such as CSC in technology park) into the CBD. Most of the guys in the IT field that I know of prefer working in the City than in the 'burbs, it gives you a chance to network with people in your own profession - and it'll help these companies fill some of the skill shortages they're facing especially in IT and engineering.

[Omicron]

I'd like to see some incentives to get some of the companies from the northern suburbs (e.g. such as CSC in technology park) into the CBD. Most of the guys in the IT field that I know of prefer working in the City than in the 'burbs, it gives you a chance to network with people in your own profession - and it'll help these companies fill some of the skill shortages they're facing especially in IT and engineering.

I'm surprised by how many large businesses to which I have applied for work are located in random suburbs across the metropolitan area. I'd much rather be in the CBD.

[AtD]

That article is estate agents being estate agents, ie, selfish gits. At least he didn't take a swipe at the Reserve Bank.

In retort, I'd believe the AFR over the City Messenger any day.

I wonder what they meant by 129 King William Street, that address is the City Central site so I'd assume they mean either CC2 or CC4.

[Howie]

Here's the 12 page special in last weekend's Australian Weekend.

Click to download (12mb)... Big thanks to AL for the scan!
http://www.adam.com.au/howiely/sa/the_australian_sa_special_report.pdf




Enjoy.

[wilkiebarkid]

Here's the 16 page special in last weekend's Australian Weekend.

12 pages methinks!

[Howie]

Opps.. thanks wilkiebarkid, i was in a rush when I wrote that.

[Queen Anne]

Just wanted to say thanks to Al for scanning this, it's much appreciated

I've been reading it for an hour and I'm still going!

[joshzxzx]

Geeeez I wonder how much that cost the Goverment...

[Howie]

Geeeez I wonder how much that cost the Goverment...

The ads were paid for but the articles were unsolicited. Otherwise at the top of the article, it would have to legally state that this is a paid advertisement and also the reporter would also have to state at the end of the article if there is a conflict of interest (you see that all the time in the business section where the reporter has to declare that they own shares in xyz company).

[Will]

Geeeez I wonder how much that cost the Goverment...

You don't think what is written is true?

[Cruise]

so when are we going to stop reading reports and see something happen?

[Wayno]

so when are we going to stop reading reports and see something happen?

be patient - calm before the storm my friend