AUSTRALIAN CBD OFFICE - SUPPLY & DEVELOPMENT MAPS DECEMBER 2016 - Knight Frank
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RESEARCH
AUSTRALIAN CBD OFFICE
SUPPLY & DEVELOPMENT MAPS DECEMBER 2016
After a hiatus in office completions in 2014, the rebound in
Key Facts new supply in 2015 continued during 2016, with feasibility
506,800m² of gross office supported by the steady decline in prime yields.
supply will be completed in cycle (only 6,000m² at 525 Collins St to be
The 2016 calendar year will deliver
2016, in line with 2015. added in 2017), however new supply will still
approximately 506,800m² of new and
refurbished stock to the major Australian average 120,000m² per annum in 2018 and
Gross supply is anticipated 2019. Perth, Adelaide and Canberra will all
to fall sharply in 2017 (down CBD markets, which is almost exactly in line
with the amount recorded during 2015 and continue to have a benign supply pipeline
55%) to 225,500m², with
slightly lower than the 10 year average over the next few years, following a
refurbishments in Sydney the
(535,000m²). The CBDs with the greatest cumulative total of only 60,800m² in 2016,
only real major additions.
supply during 2016 were Brisbane which will assist in cushioning generally
(192,741m²), Melbourne (126,768m²) and weak demand conditions.
Pipeline for additional
supply in 2018 and 2019 is Sydney (126,474m²) with the least amount of Feasibility for the construction of new space
also benign, with only supply added in Canberra (2,200m²). has been supported by steady declines in
Melbourne and Sydney adding Following the hiatus in office completions in prime yields, particularly for fund through
materially to stock. developments with strong pre-commitment.
2014, the rebound of 2015 continued into
2016. However, outside of Sydney, gross The pipeline for supply additions in 2018
2016 is expected to form the and 2019 is currently very benign nationally.
supply will fall sharply in 2017, with the total
peak of permanent office However, there will be a pick up in activity in
Australian CBD office supply anticipated to
withdrawals, as the Sydney towards the back end of this period,
be only 225,500m². With the final Barangaroo
residential development as economic rents are now arguably below
market begins to cool. office building just completed (Tower 1), the
majority of supply will occur in Sydney, albeit market rents and with vacancy falling below
almost exclusively refurbished stock, as rents 5%, numerous developments will come out
continue to be upwardly revised. of the ground in 2019, 2020 and 2021.
After seeing three major developments Permanent withdrawals of office stock
completed in 2016, namely 180 Ann St (Q2 across the major East Coast CBD and select
2016), 480 Queen St (Q2 2016) and 1 William Fringe markets accelerated through 2016,
St (Q4 2016), the Brisbane CBD will have a with the total withdrawals of 378,202m²
MATT WHITBY relatively long hiatus of new additions over expected to form the peak of withdrawal
Group Director the next few years, assisting the vacancy and levels. Despite an increase in office
Head of Research and Consulting market rents to recover. redevelopment (16%), residential and hotel
conversions or redevelopment dominate
Follow at @KnightFrankAu Melbourne is at the end of a long supply with 66% of stock withdrawn.
SYDNEY
Barangaroo T2 - 88,200m² [Westpac/Gilbert + Tobin/St George/BT]
1
LLITST - Q3 2015 - 89% committed
Barangaroo T3 - 79,221m² [KPMG/Lendlease]
2
LLITST - Q2 2016 - 78% committed
80 Pitt St# (ex QBE) - 11,400m²
3
Yorkban P/L - Q1 2017
333 George St - 12,500m² [Clyde & Co/Aimia/WeWork]
4
Charter Hall Core Plus Office Fund - Q3 2016 - 100% committed
200 George St - 38,676m² [EY/Mirvac]
5
Mirvac/AMP - Q2 2016 - 100% committed
Barangaroo T1 - 101,729m² [PWC/HSBC/Marsh & McLennan]
6
LLOneITST - Q4 2016 - 66% committed
225 George St# (ex Ashurst) - 15,789m² [JLT]
7 32 28
DEXUS/CIC/CSC - H1 2016 - 90% committed
5 29 24
One Wharf Lane, 161 Sussex St - 6,713m²
8 7 30
M&L Hospitality - Q3 2016 - 33% committed 6 17 9
30 The Bond, 30 Hickson Rd# (ex Lendlease) - 16,228m² [Roche] 1
9 27
DEXUS - H2 2016 - 67% committed 13
2
10 Shelley St# (ex KPMG) - 27,778m² [Suncorp]
10
Brookfield - H1 2017 - 100% committed 23
255 Pitt St# (ex Challenger, Apple) - 15,427m² 25
11
ISPT Core Fund - H1 2017 - 75% committed 26 3
201 Sussex St, DPIII# (ex Marsh & McLennan) - 10,343m² [Advant] 14 4
10 22
12
GPT (GWOF)/AMP (ACPF)/Brookfield - H1 2017 - 48% committed
259 George St# (ex Suncorp) - 20,352m² 20
13
Memocorp Australia - H2 2017 21
275 Kent St# (ex Westpac) - 16,130m²
14
Blackstone/Mirvac - H2 2017
680 George St# (ex EY) - 28,033m² [GPNSW]
15
Brookfield/Arcadia - 2017 - 79% committed
55 Market St# (ex St. George)§ - 2,531m² 8
16 16
CIC - Q3 2016
Barangaroo C1 & C2 - circa 19,160m² 11
17
LLOneITST - 2019+
31 19
Darling Square, Haymarket - 20,000m²> [CBA] 12
18
Lendlease - H1 2018 - 100% committed
201 Sussex St, DPII# (ex PWC) - 33,000m² [IAG]
19
GPT (GWOF)/AMP (ACPF)/Brookfield - 2018 - 100% committed
151 Clarence St - 19,910m² [Arup]
20
Investa - Q3 2018 - 29% committed
388 George St# - 36,151m² (ex IAG)
21
Investa/Brookfield - Q4 2018
60 Martin Place - 40,000m² [Henry Davis York] 15
22
Investa/Gwynvill Group - H2 2019 - 16% committed
33 Bligh St - 26,000m²
23
Energy Australia/Investa - 2021+ 18
Quay Quarter Sydney (QQS) - 90,000m²
24
AMP - 2021+
275 George St - c. 7,000m²
25
LaSalle Investment Management - 2019+
Wynyard Pl - 68,000m² [NAB]
26
Brookfield - 2020 - 44% committed
255 George St# - 22,500m² (ex NAB)
27
AMP - 2020
CQ Tower, 182 George & 33 Pitt St - 55,000m²
28
Lendlease - 2021+
Under Construction/Complete
55 Pitt St - 30,000m²+ Source of Map: Knight Frank Research
29 DA Approved / Confirmed / Site Works
Mirvac - 2020+
210 & 220 George St - 17,000m² Mooted / Early Feasibility
30
Poly Real Estate - 2021+ # Major refurbishment/backfill
NB. Dates are Knight Frank Research estimates.
Darling Park Tower 4 - 70,000m² Includes select CBD major office supply (NLA quoted)
§ Westpac extended lease for 3 years.
31
GPT/Brookfield/AMP - 2022+ > Office NLA only. Total NLA is 27,900m².
Major tenant precommitment in [brackets] next to NLA
≠ Under the current plans, a maximum above-ground GFA of 150,000
Central Barangaroo - TBC# LLITST refers Lend Lease International Towers Sydney Trust m² and an unlimited amount underground are allowed. It is uncertain
32
TBC* - 2024+ (50% CPPIB, 25% APPF Commercial, 15% Lend Lease, 10% how much of this will be office space as at September 2016.
LLOneITST refers Lend Lease One International Towers Sydney *A consortium consisting of Grocon, Scentre and Aqualand is
Trust (37.5% Lend Lease, 37.5% QIA, 25% APPF Commercial) reportedly the lead contender for development rights.
2
AUSTRALIAN CBD SUPPLY & DEVELOPMENT MAPS 2016 RESEARCH
MELBOURNE
1 525 Collins St - 6,000m² [Bank of Melbourne]
St Martins/Equiset - Q2 2017 - 70% committed.
2 664 Collins St - 25,800m² [Pitcher Partners]
Mirvac - Q2 2018 - 39% committed.
3 One Melbourne Quarter - 26,400m² [Arup/Lend Lease]
5
Lend Lease - Q2 2018 - 53% committed. 14
4 271 Spring St - 15,000m² [Australian Unity]
ISPT - Q4 2018 - 100% committed.
5 Y3, 839 Collins St - 39,200m² [ANZ]
Lend Lease - Q2 2019 - 77% committed.
6 447 Collins St - 49,000m² [King & Wood/HWL/Gadens]
Cbus Property - Q4 2019 - 40% committed.
15
7 477 Collins St - 55,000m² [Deloitte]
Mirvac - Q2 2020 - 40% committed.
10
8 311 Spencer St - 55,000m²
Australia Post/Cbus Property - 2020+ 17
9 405 Bourke St - 61,000m²
Brookfield - 2020+
16 3 2
10 5 Collins Sq - 40,000m²
Walker - 2019+
80 Collins St - 43,000m² 8
11
Queensland Investment Corporation (QIC) - 2020+
12 124-148 Lonsdale St - 55,000m²
Uniting Church/Charter Hall - 2020+
13 180 Flinders St - 20,000m²
DEXUS - 2020+
1
395 Docklands Dve - 22,000m²
14
MAB - 2019+
7
25 Digital Dve - 10,000m²
15
Digital Harbour - 2019+
6
2 & 3 Melbourne Quarter - 85,000m²
16
Lend Lease - 2020+
710 Collins St - 47,500m²
17
Abacus Property Group - 2020+
9
13
12
11
4
Source of Map: Knight Frank Research
Under Construction / Complete NB. Dates are Knight Frank Research estimates Source of Map: Knight Frank Research
Major tenant precommitment in [brackets] next to NLA
DA Approved / Confirmed / Site Works
^ Southbank precinct
Mooted / Early Feasibility Office NLA quoted
3
BRISBANE
1
15 4
6
8 2
10
7
5
14
11
12
13
9
3
Source of Map: Knight Frank Research
180 Ann St—57,465m² [CBA/Tatts Gp] 240 Margaret St—3,750m²
1 Daisho — Q2 2016—53% committed 9 Aspial Corporation—withdrawn Q4 2015
Residential Development
480 Queen St—54,985m² office NLA
2 443 Queen St—5,560m²
[BHP/ PwC/Freehills] 10 Cbus— withdrawn H1 2016
100% committed (16% Grocon headlease)
Residential Development Under Construction / Complete
DEXUS/DWPF — Q2 2016
100 George St & annex —22,906m²
1 William St—74,853m² [State Govt] 11
3 Queensland Government— H2 2016
Cbus Property/ISPT—Q4 2016 DA Approved / Confirmed / Site Works
Queens Wharf Integrated Resort Dev.
100% committed
75 William St—18,600m²
4 #310 Ann St—18,400m² 12 Queensland Government— H2 2016 Mooted / Early Feasibility
Pidgeon Family—Q1 2017
Queens Wharf Integrated Resort Dev.
12 Creek St Annex—6,297m² of GFA Former office buildings permanently
5 DEXUS Property Group/DWPF—tba
80 George St—16,150m²
13 Queensland Government— H2 2016 withdrawn for change of use 2015 &
Queens Wharf Integrated Resort Dev. forecast 2016
300 George St—c35,000m² NLA
6 Shayher Group—2018/2019
Health & Forestry House—26,651m²
14 Cromwell Property—Potential 2016
150 Elizabeth St—c35,000m²
7 State Govt Lease expires 2017
ISPT—subject to pre-commitment Source of Map: Knight Frank
As at December 2016, excluding strata
363 Adelaide St—14,700m² 62 Ann St—14,429m²
8 Valparaiso Capital —withdrawn Q1 2015
15 Wee Hur Holdings—Potential 2016
#major refurbishment
Avail office NLA quoted.
Student Accommodation Conversion State Govt Lease expires 2017
Major Pre-commit in [brackets] next to the NLA.
4
AUSTRALIAN CBD SUPPLY & DEVELOPMENT MAPS 2016 RESEARCH
PERTH
KS1 (Kings Square)*, 376 Wellington St - 22,612m²
1
5 DEXUS & DWPF - complete - seeking commitment
999 Hay Street - 10,760m² [GHD]
2
Leighton / Broad Construction Services - 56% committed
KS4 (Kings Square)*, Wellington Street - 12,000m² [HBF]
3
HBF - complete - 72% committed
2
4 123 St Georges Terrace (Brookfield Place 2) - 33,600m² [Ashurst, Corrs,
5 8
Deloitte, Brookfield, Westfarmers] - complete - 63% committed
12
11
Capital Square, 98-124 Mounts Bay Rd - 48,484m² [Woodside]
5
AAIG - mid 2018 - 100% committed 3
Elizabeth Quay - 130,000m² excluding 70,000m² Chevron Site
6
Leighton / Broad Construction Services
1
Crn Barrack St & The Esplanade - 70,000m² [Chevron] 4
7
Chevron - DA Pending
10
950 Hay St (old Melbourne Hotel site) - 10,000m²
8
Oakesfield Pty Ltd - DA received (Mooted)
480 Hay St - 34,000m² - Seeking Tenants
9
FES Ministerial Body - DA received 6
7
Perth City Link * - Circa 120,000m² exclusive of Kings Square
10
Mirvac/Leighton development consortium
239 St Georges Tce (Bishops See no.2) - 46,000m²+
11
Brookfield/Hawaiian - Mooted
KS5 (Kings Square) * - 38,000m²
12
Seven Entertainment - Mooted
9
13
Waterbank, near The Causeway - 17,000m2
Lend Lease / MRA - Initial site works
Completed / Under Construction
Dev Approved / Confirmed / Site Works
Mooted / Early Feasibility
NB. Dates are Knight Frank Research estimates
Office NLA quoted
Major tenant precommitment in [brackets] next to NLA
# Full refurbishment
* Mirvac/Leighton awarded the Perth City Link development
contract excluding the Kings Square precinct.
KS 1 to 5 are being developed by Leighton / Seven Group.
13
Source of Map: PCA
5
ADELAIDE
50 Flinders St - 20,572m² [People's Choice C.U., Santos, BUPA]
1
Cbus - October 2015 - 91% committed
81-95 Waymouth St # - 17,378m² [SA Govt]
2 4
KTS Properties - May 2016 - 70% committed
115 King William St - 6,775m² [No Pre-commitment] 6
3
Brinz Holdings - October 2016 - 10% committed
170 Frome St - 3,900m² [Grant Thornton]
4
Emmett Properties - December 2016 - 38% committed 8
GPO Tower, 12-26 Franklin St - 24,000m² [SA Govt] 13
5
Charter Hall/Telstra Super Fund - 2019 - 52% committed 1
185 Pirie Street - 6,000m² 7
6
Palumbo / Pruszinski - 2018+
10
186-190 North Terrace - 5,000m² 101 Pirie St - 6,788m² [Health Partners] *
7
Adelaide Development Company (ADC) - 2018+ Health Partners Ltd -3Apr 2014 - 55% committed
5
8
102-120 Wakefield St - 16,500m ² Riverbank
Kyren Group - 2018+ 11
Precinct
2
Festival Plaza / Riverbank Precinct - 40,000m² 9
9
Walker Corp/SA Government - 2019+
322 King William Street* - 12,482m²
10
Karidis - 2019+
42-56 Franklin St - 21,000m²
11
Kyren Group - 2019+
Worldpark - Richmond Rd, Keswick - 22,600m²
12
Axiom (Stage B & C) - 2019+
57-61 Wyatt Street - 4,180m²
13
Private - 2019+
Worldpark, 12
Keswick
Source of Map: PCA
NB. Dates are Knight Frank Research estimates
Under Construction / Complete Major tenant pre-commitment in [brackets] next to NLA
17
DA Approved / Confirmed # Major refurbishment
C.U Credit Union
Office NLA quoted (>3,000m²)
Mooted / Early Feasibility
* Mixed use development comprising residential, retail, hotel and
commercial
6
AUSTRALIAN CBD SUPPLY & DEVELOPMENT MAPS 2016 RESEARCH
CANBERRA
9
3-7 Molonglo Drive, Airport - 36,000m² [DoI&BP*] NORTH
1
Capital Airport Group - Complete - 100% committed
2 Constitution Ave ^ # - 6,815m²
2
ISPT - Complete (total NLA 20,014m²) - 66% committed
Tuggeranong Office Park - 30,707m² [Dept of Social Services]
3
Cromwell Property Group – Q3 2017, 100% committed ~
Section 19 (Block 4)^ - 20,000m² [ACT Govt] 6
4 8
ACT Govt/Capital Property Group - 2020, 100% committed 12
33 Allara St^ # - 9,201m² [MDBA]
5
Molonglo Group - Q2 2017, 43% committed
17 Moore St^ # - 5,857m²
6
CorVal - Q2 2017
Constitution Place - 12,000m² ≈
7
Capital Property Group - Q4 2019
11 4 7 5
15
Civic Quarter, Northbourne Ave^ - 18,000m² 2
8
Amalgamated Property Group - Q3 2019
13-15 Challis St, Dickson - 13,000m² (MVR site ‡)
9
ACT Govt - 2019
Section 12 (Block 9 & 10) - 35,000m²
10
A&S Haridemos - 2020+
Signature Building 2, London Circuit^ - 16,000m²
11
Leighton/Mirvac JV - 2019+ subject to pre-commitment
Section 96^ - 37,500m²
12
QIC - 2019+ subject to pre-commitment
45 Furzer St, Phillip - 40,600m²
13
Doma Group - 2020+ subject to pre-commitment
2 Darling Street, Barton - 11,500m2
14
Doma Group - 2019+
Landmark Building, London Circuit^ - 54,000m²
15
Leighton/Mirvac JV - mooted AIRPORT
1
NB. Dates are Knight Frank Research estimates
Major tenant precommitment in [brackets] 14
* Dept of Immigration & Border Protection
≈ Speculative Development
^ Civic precinct
Office NLA quoted
# Major refurbishment
~ Development is of the same size as what it's replacing
‡ Motor Vehicle Registry site
SOUTH WEST
Under Construction/Complete 13
3
DA Approved / Confirmed / Site Works 10
Mooted / Early Feasibility
Source of Map: ACT Planning and Land Authority (ACTMAPi)
7
COMMERCIAL BRIEFING
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RESEARCH
Matt Whitby
Group Director
Head of Research and Consultancy
+61 2 9036 6616
Matt.whitby@au.knightfrank.com
Jennelle Wilson
Senior Director—Research Qld
+61 7 3246 8830
Jennelle.wilson@au.knightfrank.com
Richard Jenkins
Director—Research Vic
+61 3 9604 4713
Richard.jenkins@au.knightfrank.com
Paul Savitz
Director—Consulting
+61 2 9036 6811
Paul.Savitz@au.knightfrank.com
Alex Pham
Senior Research Manager—NSW
+61 2 9036 6631
Alex.Pham@au.knightfrank.com
OFFICE LEASING
David Howson
Head of Office Leasing, Australia
+61 2 9036 6697
david.howson@au.knightfrank.com
OCCUPIER SOLUTIONS
John Preece
Head of Occupier Solutions, Australia
+61 2 9036 6705
john.preece@au.knightfrank.com
CAPITAL MARKETS
Paul Henley
Knight Frank Research provides strategic advice, consultancy services and forecasting Head of Commercial Sales—Australia
to a wide range of clients worldwide including developers, investors, funding +61 3 9604 4760
organisations, corporate institutions and the public sector. All our clients recognise the Paul.henley@au.knightfrank.com
need for expert independent advice customised to their specific needs.
AUSTRALIA
Stephen Ellis
RECENT MARKET-LEADING RESEARCH PUBLICATIONS CEO, Australia
+61 2 9036 6611
Stephen.Ellis@au.knightfrank.com
Sydney CBD Office & Development Market Residential Global Cities
Hotel Ownership Insight Insight Development Review The 2017 Report
December 2016 September 2016 H2 2016
Knight Frank Research Reports are available at KnightFrank.com.au/Research
Important Notice
© Knight Frank Australia Pty Ltd 2016 – This report is published for general information only and not
to be relied upon in any way. Although high standards have been used in the preparation of the
information, analysis, views and projections presented in this report, no responsibility or liability
whatsoever can be accepted by Knight Frank Australia Pty Ltd for any loss or damage resultant from
any use of, reliance on or reference to the contents of this document. As a general report, this material
does not necessarily represent the view of Knight Frank Australia Pty Ltd in relation to particular
properties or projects. Reproduction of this report in whole or in part is not allowed without prior
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