Sydney, NSW, Australia

Sydney’s property market leaders believe there will be little change in their level of investment in Sydney CBD in 2008, according to the findings of an exclusive research poll undertaken by Colliers International.

Colliers International revealed the findings from their first exclusive Market Leaders Poll at their “Predictions for the Sydney CBD Office Market” Client Forum on Wednesday night.

Colliers International National Research Director Rory McLeod said the research had been designed to determine where the industry’s market leaders believe investment will track in 2008.

When asked how their level of investment in Sydney CBD property would change in 2008 versus 2007, most investors said they would not change their investment strategy, with 43% saying they would be buying the same and 64% saying they would be selling the same.  In comparison, 36% said they would be buying less and 27% said they would be selling less.

In the office leasing market, most respondents (46%) said they expect gross face rents to increase by 5-10% for both prime and secondary grade property.  Mr McLeod said this figure reflected Colliers International’s forecast of a 5 – 8% increase, as stated in the company’s recent Sydney CBD Market Indicators Report Autumn 2008.

When asked to share their sentiment for how yields would change, for prime grade property the most common response at 34% was for yields to increase/ soften by 0.25 to 0.50% in 2008, while for secondary grade property the 34% expect  an increase/ softening of 0.5 to 0.75% in 2008.

Mr McLeod said Colliers International was not surprised at the findings.

“The reality is that market sentiment is nowhere near as negative as some people may have been led to believe,” said Mr McLeod.

“The financial markets have been hit and this has affected property, however the news isn’t as bad as some have been suggesting.

“Our instinct was that the current climate reflected an overreaction and when we asked people the simple questions to gauge the true sentiment we found this to be true,” he said.

“The fundamentals of office property are still very strong and we believe we will also soon see a return to an active sales market, albeit at new yield levels.”

The poll was conducted online in the last week amongst a qualified group of senior decision makers within the  Sydney property industry. 

Respondents covered the full cross section of the industry including wholesale funds, listed funds, private investors, developers, superannuation funds and smaller emerging funds.

It is estimated the group polled represents approximately 75% of the ownership of buildings in Sydney CBD.

About Colliers International

Colliers International is a global affiliation of independently owned commercial real estate firms. The organization's 10,092 employees span the world in 267 offices in 57 countries. On a worldwide basis, Colliers manages 672,945,918 square feet, and has revenue of $US 1,620,958,349.

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