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Colliers International | Global Occupier Guide

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Sydney

PCA*

Space Measurement Standard
SQMT
SQFT
Space Unit of Measure

AUD

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Financial Data Currency

Yes

Transfer Taxes

Notes:

*Property Council of Australia (BOMA was the predecessor of the PCA)

Office Occupier Market Condition

Occupier Market Conditions – How conducive is the regulatory environment to starting and operating a business. Source: Colliers

Labor Cost – Wages for skilled office workers. Source: City Globe and Colliers

Tenant Favorable – Assessment of the real estate market condition for office space. Source: Colliers

Quadrant Legend: Blue = Favorable Medium Blue = Neutral Red = Less Favorable

Typical Loss Factor

*

From rentable to useable square meters

Loss Factor Notes:

*We generally delineate between Net (occupiable) and Gross (occupiable plus common area/amenity)

Landlord Concessions

Fit-Out Concession

The Landlord typically provides a contribution or concession to fit-out as a part of the lease transaction.

Amount of Fit-Out Concession

$540/sm-$2000/sm

Typical range of fit-out contribution.

Fit-Out Cost Notes:

Headline total incentive package (30%-38% gross incnetive current average range) is negotiated and the tenant decides in which form it will take it.

Rent-Free Period

The Landlord typically provides a contribution or concession in the form of a rent-free period.

Standard Range of Rent-Free Months

1mo.-5mo.

Typical number of rent-free months.

Tenant Rep Broker Fee (New Leases)

The tenant rep broker’s fee is typically split between the Landlord and Tenant.

Tenant Rep Broker Fee (Renewals)

The Tenant typically pays the tenant rep broker’s fee.

Payment of Fees/Commissions Notes:

Typically tenant (but can be landlord).

Lease Provisions

Lease Term

3yrs.-10yrs.

Typical lease term in years.

Operating Expenses & Service Charges Included

Quoted market rent typically does not include operating expenses (service charges). There are additional charges that apply to leasing space.

Additional Charges

$160/sm-$270/sm

Estimated range for all additional charges per Square Meters.

Additional Charges:

Utilities
Service Charges
Stamp Duty
Electric
Rates
HST
Cleaning
Hydro
Registration Fees
Taxes
Insurance
VAT
Other

Lease Fundamentals: The following apply to both office and industrial leases.

Lease Execution Requirements:

Typical upfront requirements
None for strong credit tenants
Upfront rental payment
Security deposit
Corporate guarantee
Not Applicable

Negotiated Subletting/Assignment

Typically, the tenant's right to sublease or assign the space is negotiated in the lease agreement.
Landlord Consent: Typically, the landlord's written consent IS still required.

Statutory Subletting/Assignment

This is NOT a statutory right.
Landlord Consent: The Landlord's consent is NOT required.

Blend & Extend Strategies

Typically, a tenant can take advantage of "blend & extend" ("forward renewal", "early renewal", etc.) strategies when the appropriate market conditions exist.

Blend & Extend Notes:

Depending on the motivation from the Landlord.

Statutory Early Termination

This is NOT a statutory termination right.

Negotiated Early Termination

It is NOT typical for tenants to be able to negotiate an early termination right in the lease agreement.

Workplace

Regional Office Space

10sm-15sm

Typical Square Meters per employee (includes office square footage for employees and contractors).

Regional HQ Office Space

8sm-15sm

Typical Square Meters per employee (includes office square footage for employees and contractors).

Workplace Notes:

Regional: A regional office of 2,000sqm would have a approx 167 employees using a utilization rate of 12 .



HQ: A HQ of 10,000sqm would have approx 1,000 employees using a utilization rate of 10.

Desk Sharing

Desk-sharing is a common practice in the market.

Desk Sharing Average

0.8

Average headcount per workstation.

Operating Environment Rankings reported on a scale of 1 (least favorable) to 10 (most favorable).

Human Capital

8/10

Labor Force Growth
Labor force growth rate (past 5 years)

5/10

Wage Inflation
Rise in wages (past 5 years, local currency)

4/10

Millennials
Proportion of population in the age 20-39 cohort


6/10

High School Education Equivalent
Proportion of population attaining this level

7/10

University Education Equivalent
Proportion of population attaining this level

7/10

Overall Education
Composite average of High School & University


6/10

Human Capital Composite

Business Climate

5/10

Innovation
Presence of innovative factors in economy

5/10

Economic Risk
Resilience of economy to unexpected events

8/10

Business Environment
Friendliness of business environment

1/10

Corporate Tax Rate
Favorable corporate tax rate


5/10

Business Climate Composite

Operating Environment Composite

6/10

Combined average score of Human Capital and Business Climate factors

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