Parramatta. Vacancy rate 'least volatile'

The Parramatta office vacancy rate has historically been the least volatile of all NSW markets and has held relatively steady over the past few years, according to Knight Frank’s Parramatta Office Market report. The vacancy rate has peaked and with no new supply to enter the market in the short-term, coupled with improving demand the vacancy rate is expected to trend below 8 per cent by mid 2011 and continue on this downward trajectory in 2012. With vacancy in the A-grade segment to remain negligible and no new space coming on line in the short term, face rents will rise and as incentives begin to wind back. The Parramatta office market is returning to its traditional place in the Sydney investment spectrum being a strong yielding market known predominantly for its return characteristics. Although there have only been a handful of sales over the past year, the recent transactions highlight the disparity between what the market will pay for quality buildings with long leases compared with secondary assets with short WALEs and capex requirements, where double digit yields have become the norm, the report said.