Rosebank office space to rent - 2 ends of the spectrum
Category News
Rosebank is undergoing a transformation of it's classic skyline, with new office developments coming on board on a daily basis it seems. These new developments are giving the office market a view that office space rentals are still in high demand in Rosebank. Perhaps not as simple as that I am afraid. It may in fact be indicative of a longer term suburb developmental cycle.
If we look back over the last 20 years of office development in Rosebank, we can start picking up a general trend on how a suburb evolves. Firstly, it starts with new developments of office space, where there is zoned land available. These office developments happen over a relatively short period of time (24 - 36 months) in response to a demand for new office space in the desired suburb, in this case Rosebank. There is an immediate increase in office rental vacancies, as the new office developments cannot exactly match the immediate demand and therefore an oversupply in the short term is evident.
With an oversupply of office space rentals in Rosebank, the natural place to find new tenants would be in the suburb itself. New tenants are therefore attracted into new office developments, with the promise of savings on operating costs, due to Green Principles that have been utilised in the development of the new office space. Tenants from existing office space in Rosebank are attracted towards these new developments as a status symbol, and also with the added operational savings associated with the move. This however, creates a glut of new vacancies in the older office spaces in Rosebank.
The next phase occurs as Landlords desperately try to retain existing tenants in their office buildings, by offering massive tenant incentives, as well as commission incentives to brokers who can lure tenants towards their buildings. This creates a highly competitive market, which is a loss leader in the short term for most Landlords, but they are vying for market share from a limited pool of office rental tenants.
The leftover office space that cannot be viably rented any longer, is purchased by owners looking to convert the office space into residential apartments. These office spaces are close in proximity to the Rosebank CBD, and it is therefore creating a larger work / play environment in the greater Rosebank area. Once these apartments are occupied, mostly by people working in Rosebank, then the cycle starts again. Residential conversions are occupied, which has reduced the supply of A/B Grade office space in Rosebank. The reduced supply of these "2nd hand" office spaces, and the low vacancy rate of new developments, create a demand once again that can only be quenched from more new developments. And so the cycle goes.
So where are we in this office developmental cycle in Rosebank. Well, probably still a way to go. New developments are standing largely vacant due to the battling economy. Tenant incentives are still keeping existing tenants in their existing offices. At some point though, the balance will tip and the new developments will fill up faster than we can blink. We just need some positive sentiment, both politically and economically, to give the office rental market the shot in the arm that it is currently craving for. Good luck Rosebank, we are right behind you.
Author: Grant Williams
