BING NEWS
Pre-Lease Sector Heating Up
As the financial year comes to an end, it marks the half way point of activity within Melbourne’s western industrial marketplace for 2015. As far as deal volume is concerned, the first six months of 2015 in the general leasing sector has been quite moderate despite a significant improvement in enquiry levels. Year to date there has been 83,757m2 of existing warehouse space leased in the 5,000m2 + sector of the market, from 13 transactions. There are currently another 4 transactions at HoA stage which would increase take up by 40,000m2 if the deals are completed. Assuming all of these deals are concluded, then 2015 is on track to be a year where activity sits in the moderate band of take-up when viewed against the five year average. We do however believe there is potential for activity to accelerate dramatically should occupiers gain confidence in the back half of 2015, so our overall outlook on this sector is positive.
The stellar story of the year thus far is the dramatic increase in pre-commitment activity in the market. There has already been in excess of 90,000m2 of space pre-committed in 2015, with a staggering further 235,000m2 of enquiry up for grabs. We are therefore anticipating a two-fold increase of activity in this sector from 2014 to 2015, which mirrors the same level of percentage growth from 2013 – 2014. Needless to say this is the shining light of Melbourne’s west at present and should provide great confidence to developers and englobo land owners alike.
The final major trend is the owner-occupier activity in the market, which is only being held back by a lack of available supply. We note that buyers in this sector are primarily looking to purchase at rates that reflect a discount to new, which is typically in the $750 – $850m2 range. We would welcome any listing opportunities that meet with this criteria.
On a personal note, Bing Property Group would like to thank our clients for their support in our first five months of trading.
From the outset our vision was to build a business that focussed primarily on; existing assets in excess of 3,000m2, pre-commitments, and major land purchase activity in excess of 10,000m2. Whilst we acknowledged that this specialisation was likely to result in less turnover at a higher value, we are pleased to inform you that we have concluded seven significant transactions year to date.
Should there be anything we can assist you with please don’t hesitate in contact me.