Goldman: Office values to CRASH

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Via AFR:

The bleak outlook is driven not by the potential impact of the pandemic on the CBD office market, but the sharp pullback in values and rents due to a cyclical downturn that was already well under way before the coronavirus outbreak, Goldman Sachs analysts said in a recent client note.

…Goldman Sachs expects vacancy in the Sydney CBD to peak about 13 per cent by the end of 2022, when net effective rents will fall by 40 per cent. Peak vacancy, also close to 13 per cent, will hit the Melbourne CBD a year earlier, with net effective rents to drop by 42 per cent.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.