Take-up in the first quarter of the year stood at slightly over 105,000 sq m. Which is a 36% decrease on Q1 2013, although this is skewed by a major (50,000 sq m) single deal that took place in Q1 last year.
The 9% increase in the number of signed transactions, would suggest a slight recovery in demand.
For the second consecutive quarter the overall market vacancy rate decreased slightly standing at 13.6%. The CBD and most consolidated business areas continue to have vacancy rates well below this level, whilst the outer periphery continues to see vacancy rates of double and even triple that figure.
The CBD and the areas closest to it are beginning to see signs of a recovery in rents. Meanwhile, the areas furthest out of the city, with over-supply and a lack of demand, continue to see rents fall, indicating a two-tier market.
The intense activity seen in the investment market at the end of 2013 continues apace. However, the ever greater demand is facing a significant shortage of product for sale. The end result is highly competitive sales.
The imbalance between general supply and demand is even more evident for prime product, which is driving yields to contract. In the absence of comparables, based on the offers received, the achievable CBD yield would now stand at 5.50%, which is 50 basis points below the level registered last year.
Source : Savills