Looking Back, Moving Forward
The Property Council of Australia releases its Office Market Report (OMR) on Thursday morning. While we wait with bated breath to see what the future holds, it is always fascinating to reflect on the past.
We compiled examples of a few leasing deals we completed from 1986 to mid-1987 that highlight just how much the Sydney CBD office market has changed.
391 George Street: January 1986 – Rent $177.60
First Deal. Building no longer exists.
391 George Street: July 1986 – Rent $172.22
3 floors to ANZ and building no longer exists
507 Kent Street: May 1986 – Rent $258.00
Paddy Pallin shop ground floor and still exists. Met the great man himself
Australia Square: August 1986 – Rent $357.14
My how times have changed
36 Clarence Street: March 1987 – Rent $220.58
SMEC and now a hotel
1 Alfred Street: March 1987 – Rent $360.00
Captain Cook Cruises. Building no longer exists but CCC still showing off our beautiful harbour
Rents were gross, market vacancy was 3%, incentives did not exist (a month or 2 rent free if you were lucky), lease commencement dates were next month or the month after, and leases were drafted, reviewed and executed in 2-14 days. Activity was high and so was net absorption. They couldn’t build buildings fast enough.
Grosvenor Place was being built, and the market would have been approx. 3,000,000 m2 using the first PCA OMR in January 1990 with an inventory of 3,400,000 m2. Today it is about 5,200,000 m2.
The only technology was landline, telex and fax – dependent on the company. Phone numbers were not portable, some were still only 5 numbers and were dependent on the location of the office so it could be connected to the nearest Telecom Australia (Telstra) telephone exchange. No one ever moved that far until technology improved
Stockbroker firms were located near 20 Bond Street, Lawyers were near the courts and the western corridor was considered CBD fringe by some.
Occupancy/utilisation was 100% by technological default, hybrid meant hybrid, remote meant back of Bourke, mandates were laws or political promises, and if you worked from anywhere, you were probably not working. Smoking was still permitted in the office – even in open-plan work cubicle layouts.
In 1987, the first mobile phone call was made in Australia, and we met the first tenant rep who happened to send the market in a tizzy because no one ever thought a tenant should be represented.
How things have changed.
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