Thought Leadership

The future is hybrid. Office usage patterns will change, and occupiers will become nimble to maximize efficiency.

As landlords grapple with changing consumer behaviour and increasing vacancy, the number of new gyms and fitness studios opening across Australia has grown solidly. Can landlords capitalise on this demand to fill residual space in shopping centres?

This article was originally published in https://www.cbre.com/

Retail sales fell -1.7% (m-o-m) in August. This fall was off the back of lockdowns in  Sydney, Melbourne and Canberra which resulted in a sharp decline of consumer spend on clothing and footwear and at cafes and restaurants. This is expected to rebound strongly in Q4 once lockdowns lift.

Consumer confidence has shown continued recovery, in part driven by stronger than expected employment outcomes. Consumer sentiment index grew 2.0% m-o-m in September to measure 106.2 off the back of roadmaps out of lockdowns being released.

Rents were stable in most markets with large format retail recording strong net face rental growth of 9.9% y-o-y.

Yields sharpened across all assets classes as capital continues to look to the retail sector for solid returns.

Transaction volumes in Q3 2021 totalled $2.12b, up 91% on the same period in 2020 which was heavily impacted by COVID restrictions.

This article was originally published in https://www.cbre.com/

Vacancy rate rising but demand growing for large-scale units in Tokyo

Tokyo: Grade A minus vacancy rate reaches 4% for first time in seven years
All-grade vacancy rate rose by 0.8 points q-o-q to 3.6% in Q3 2021, led by increase in vacancy in existing premises. In particular, Grade A-minus vacancy rate rose the largest among all three grades. All-grade rent was down by 0.8%, with Grade A rents falling the most.  With significant new supply slated for 2023, landlords are lowering rents to secure tenants.
 
Osaka: Vacancies filled in Grade B buildings
The all-grade vacancy rate rose by 0.5 points q-o-q 2.8% in Q3 2021. With many tenants remaining cost-conscious, smaller premises are in higher demand than larger spaces, meaning that Grade B units are increasingly favored. Rents fell across the board in Q3 2021, with Grade A rents dropping sharper than those for Grade B buildings.
 
Nagoya: All-grade vacancy exceeds 3% for first time in four years
The All-grade vacancy rate rose by 1.0 points q-o-q to 3.8% in Q3 2021. Larger premises tend to require more time to secure new tenants. With pre-leasing of units slated for completion also sluggish, the vacancy rate is projected to continue to rise. All-grade rents were down 0.1% q-o-q, driven by lowering of asking rents for Grade A offices with relatively large vacancies.
 
Regional cities (Sapporo, Sendai, Saitama, Yokohama, Kanazawa, Kyoto, Kobe, Takamatsu, Hiroshima, Fukuoka): Subdued tenant interest in large-scaled office space
The All-Grade vacancy rate for Q3 2021 rose in six of 10 regional cities, fell in two, and remained unchanged in two. Smaller units of 100 tsubo or less secured tenants across a range of industry sectors looking to expand or set up new establishments. All-Grade rents rose q-o-q in five of 10 cities, fell in three, and remained unchanged in two. The cities whose rents rose were due to contracted rents of newly completed buildings pushing up the overall average.

This article was originally published in https://www.cbre.com/