NEW OFFICE SPACE LEASES RISE 21 PER CENT

STRONG small business activity has driven a 21 per cent increase in the amount of office space leased across major Australian markets, according to Colliers International's latest Office Demand Index.

The reports shows that a total of 448,163sqm of office space was leased nationally as of September YTD 2016, with 85 per cent of those leasing deals involving businesses looking for less than 1,000sqm of office space.

"Year to date, the Sydney and Melbourne markets have seen heightened activity for small businesses," says Simon Hunt, Colliers International Managing Director of Office leasing.

"A growing number of small businesses are looking to establish their headquarters in Australia's two major markets, with the IT industry leading the way."

A significant proportion of leasing deals concluded to date in 2016 involved businesses within the IT sector, with this group accounting for the third greatest amount of area transacted, following the always-prevalent state government and legal sectors.

Colliers International's Office Demand Index recorded 465,162sqm of demand in Q3 2016, a 13 per cent decrease compared to Q3 2015 - 79 per cent of the total demand was for office space under 1,000sqm.

However, the number of enquiries recorded year to date was up by 8 per cent on the previous year, with the amount of space enquired for increasing by 3 per cent.

Sydney recorded 210,407sqm of demand, up 22 per cent on Q3 2015, while Brisbane recorded 31,380sqm of demand a 31 per cent increase from Q3 2016 to Q3 2015. In Canberra, demand rose 27 per cent year on year to 14,260sqm.

Melbourne saw a 38 per cent decrease in enquiry, from 239,594sqm in Q3 2015 to 149,320sqm in Q3 2016.

"Even though Melbourne recorded a drop in demand for Q3 2016, the amount recorded still  surpassed that seen in Q1 2016 and Q4 2015," says Hunt.

In Adelaide, enquiry fell 33 per cent from 50,704sqm in Q3 2015 to Q3 2016 and Perth saw a decrease of 53 per cent from 35,595sqm of enquiry in Q3 2015 to 16,663sqm in Q3 2016.