Office vacancy splits between premium and secondary stock
Premium CBD vacancy has fallen below 8 per cent in Sydney while secondary buildings sit above 18 per cent.
Premium grade vacancy in the Sydney CBD fell to 7.6 per cent in the June quarter, while secondary stock across the same market sits at 18.4 per cent.
Melbourne's spread is wider still: 9.2 per cent premium against 21.6 per cent secondary, the largest gap recorded since the series began.
Repositioning economics have deteriorated. On several inner Melbourne assets, upgrade costs now exceed the difference between secondary and premium capital values, which is pushing owners towards residential conversion where planning permits it.
Sources
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