Leasing demand rebounds at Centuria office after difficult year
In financial terms, funds from the operations of the real estate trust, known as COF, reached $ 102.2 million as of June 30 from $ 85.4 million in the previous corresponding period.
“The success of leasing has resulted in a solid commercial performance [and] COF’s market confidence is bolstered by a FY22 distribution forecast of 16.6 cents per unit, ”said Nichols.
He said COF leased more than 52,000m² of office space during the year in 61 transactions, or 18% of net leasable area – the best ever for the largest pure office fund. play from Australia.
We will see an increase in tenant flexibility in terms of what they offer their employees, but I think working from home has been overrated.
– Grant Nichols, Fund Manager of Centuria Office REIT
He said there had been no significant rent increases on new leases signed and that the average lease expiration had dropped from 4.7 years to 4.3 years.
Much of the demand is for well-connected peripheral offices outside of the CBD, he said.
“The pandemic has accelerated the transition to offices in good locations that allow people to travel and offer end-of-trip facilities and flexible workspaces,” Nichols said.
“Access to excellent public transportation, parks and recreational facilities is increasingly desirable. “
CBD is another matter.
“The biggest expiration date we have is at 818 Bourke Street in the Docklands in Melbourne. We had a vacant 10,700 m² tenant. They had committed to moving before COVID, so it was unrelated to COVID.
“Melbourne has been a challenge because the continued closures have made it difficult for businesses to return to work and even activities such as inspections.
“So it’s a bit problematic. But we are seeing a level of pent-up demand that should return to the market.”
Mr Nichols said 818 Bourke Street has an occupancy rate of 61%.
“We hope that once things get back to normal you will see an acceleration in tenant surveys,” he said.
“In Melbourne, most of the biggest tenant movements probably didn’t happen because of this uncertainty. “
Looking ahead, Mr Nichols said the immediate future of the offices depended on a successful vaccination program.
“Once we have a health solution to the pandemic, I think you will see a lot more companies return to work more fully,” he said.
“We will see an increase in tenant flexibility in terms of what they offer their employees, but I think working from home has been overrated.”