Oversupply in Adelaide's Office Rental Market

According to the BIS Shrapnel Adelaide Commercial Property 2014 to 2024 report, margins for office rental investors could be no more than 3 percent over a five year term. This abysmal figure is a definite sign of low demand and oversupply.

The slowed economic growth in the region and removal of large scale government projects have reeked havoc on the office space market in South Australia. Office buildings are still being built and supply is continuing to rise, meaning that vacancy rates are assured increase significantly over the next decade, well above their current 15 year high of 13.8 percent.

This is bad news for an economic sector that now won't see any sort of recovery in the near term. The negative growth in the industry is likely to spill over into the housing sector which in the 3 months leading up to November 2014 has risen by less than 1 percent.

It's not all bad news for Adelaide's economy though. With a bit of economic reform, the economic recovery we have been looking for could come in the way of foreign investment. By case of example, an American company, Ashley Furniture with an annual turnover of 4 billion, is expected to open it's first Australian store in Adelaide's suburb of Gepps Cross, just in time for the Christmas rush. It's investments like these that could very well pull Adelaide out of an economic depression.

Adelaide Storage 2km from CBD

Egans Adelaide have recently acquired new storage facilities 2 kilometres from Adelaide's CBD. Proximity storage access for South Australian business is crucial for urban development and expansion. Local businesses require temporary furniture storage during office moves or refurbishment. It is essential for these businesses to receive pickup and delivery service to and from a storage facility to minimise disruption to their workplace.

Longer term every day storage solutions with item tracking is necessary for many businesses that lack storage space at their premises and cannot afford to dispose and hire, or repurchase furniture. Conferences, larger meetings, work functions, and other activities beyond every day business demand excess furniture that many corporations do not have the space for.

Business in Adelaide is not as flat as one might assume. The industrial sector has been picking up pace for a while now which a good sign for the rest of the city. Charter Hall Group is not far off from buying the Coles Regional Distribution Centre, just North of the CBD. Large new investors are giving the established parties a run for their money.

Cathay Pacific has begun direct non stop Hong Kong to Adelaide flights in response to increased business in the city. Adelaide can't afford to ignore international investment in the city as it underpins the economy and has pulled the city out of recession. Even the University of Adelaide would be in financial hardship without overseas students who have replaced local students as the growth segment for the university.

 Community initiatives such as the Renew Adelaide Project which provides free rent for artists and designers to reoccupy dormant buildings in Adelaide are helping to rejuvenate the city. The positive attitude and innovative culture of South Australians is leading the city towards a successful future.

The transport and logistics sector has been stagnating over the last few years due to lack of growth in the economy. The removals and storage industry however, has begun to flourish with the first signs of increased activity in the CBD. Growth in this industry is usually a precursor and catalyst for growth through out the sector.

Free Assessment to Liquidate your Office or Business Assets

In Adelaide, we provide free professional assessments for the liquidation of your office furniture, IT, white-goods, or industry assets.

Moving office can be a nightmare, especially considering the number of stakeholders to be engaged. We will estimate of how much your furniture is worth and what can be done to offset the cost of your move. We have the means to find buyers for your furniture through industry partners, tenders, furniture auctions, and recycling partners.

We liquidate offices every day across  Australia.

We will provide a solution for every asset including your hard waste. We are committed to sustainable office liquidation through our Wise Office Furniture program with an aim of 100% landfill avoidance.

Get a free assessment 1300 298 578
Ask to be transferred to our Adelaide branch.

How is commercial real estate affecting Adelaide's standard of living?

Adelaide, once known as the most liveable city in Australia has digressed in recent years. Canberra is now officially the most liveable city in Australia. The latest survey by Auspoll places Adelaide in second followed by Perth and Sydney. The least liveable city is said to be Darwin according the poles. So what does this have to do with commercial real estate.

Well it turns out that policy that governs what we do with our commercial properties affects residential property prices and consequently our cost of living. Adelaide has the opportunity to develop policies that create openings for developers to re-purpose office buildings and other commercial structures into residential developments. The increase in supply will ease price pressures on residential abodes and in turn advocate affordable housing.

Large government and industry infrastructure projects are another way for Adelaide to put themselves back on the most liveable map. Not only will this stimulate the economy, but new hospitals, faster and better Internet coverage, and better transport systems can go a long way to improve the city's liveability. To achieve this, local government must step in and provide incentives for industry development in addition to prioritising government funded infrastructure projects. This can however be a double edged sword as higher taxes used to fund these projects will reduce the standard or living and decrease public spending.

A newspoll survey has reported that labour may very well be set to lose their 12 year reign in Adelaide. A liberal government will most likely cut taxes in the city which is winning over the people, but labour has initiated projects such as the redeveloped of the Adelaide Oval and the new Royal Adelaide Hospital which is important considering the current state of South Australia's economy. The premier wants to push ahead with $117 000 000  renovation of the city's Flinders Medical Centre, and an $85 000 000 city high school at Royal Adelaide.

sources:

http://www.grocon.com/

http://www.canberratimes.com.au/comment/as-australias-most-liveable-city-we-have-much-yet-to-do-20140301-33tad.html

www.auspoll.com.au

http://au.news.yahoo.com/a/21851838/labor-set-to-lose-sa-after-12-year-rule/

http://www.abc.net.au/news/2014-03-05/chinese-buyers-to-invest-44-billion-dollars-in-australian-real-/5300494

http://www.commercialrealestate.com.au/

http://www.lendlease.com/