Despite broader headwinds facing the national economy, current conditions are supportive of growth in NSW. Low interest rates, currency depreciation, the strengthening US economy and modest improvement in Europe have all started to benefit demand.
As a result, Sydney CBD’s net absorption in the six months to January 2015 was equivalent to 1.2% of total stock; the strongest result since 2010. CBD tenant demand is outperforming other national markets and, despite the pending arrival of new supply completions, the vacancy rate is forecast to fluctuate between only 6.5% and 8.0% over the next two years.
It is obvious to state, but Office Leasing Agents who want to remain competitive need to fully understand all facets of the market including future vacancy, financial analysis and their individual clients’ goals and drivers for each asset.
The plethora of Tenant Representatives is relatively new to Sydney, when compared to markets such as London and New York, with Sydney now reporting over 100 tenant reps in the CBD; nearly double the number of office leasing agents. This further highlights the need for leasing agents to have and maintain strong occupier relations, more than ever before.
Landlords are increasingly demanding more from their agents, and rightly so. Agents cannot simply rely on reactive deals or enquiries. They must be active in the market on all fronts, including the provision of detailed financial analysis, having a deep understanding of market trends and occupier drivers, (such as the emergence of Activity Based Working Environments and the calling for more efficient interactive space), and all the while providing the highest level of customer care and attention.
In any negotiation, if the agent doesn’t have a Win:Win approach, it will affect not just their own future business, but also that of the client. In a property market the size of Sydney, news travels fast, so a positive start with a no surprises approach and total transparency in all dealings is crucial.
The level of attention given to occupiers is also being elevated as landlords, agents and tenant representatives compete for their business more than ever before. Even though agents are instructed by owners, it is imperative to foster strong bonds with occupiers – Without the occupier; there can be no transaction…
Agents are also increasingly competing with property portals as their offering becomes more sophisticated and intuitive, and therefore demonstrating the added value an agent can bring to the leasing process is crucial.
The question is, will our industry step up and deliver the new breed of leasing agent required to meet the market demands of the profession?
Robin Brinkman is an Associate Director of Office Leasing at Knight Frank.
For further information, please contact:
Robin Brinkman, Associate Director Office Leasing +61 449 176 070
Jessica Freeman, Associate Director, PR & Communications, NSW +61 411 354 307