Australia’s average commercial lease length drops in pandemic: Re-Leased

11 October 2021

The latest commercial lease length figures from commercial property management software company Re-Leased reveals a drop throughout this year as businesses deal with the second year of the global pandemic.

The average lease length in Australia has fallen from a high of 2.09 years in August last year to now be at just 1.98 years. Re-Leased’s CREDIA platform has provided insight into the average lease length data for overall commercial property in Australia, as well as average lease lengths for the industrial sector specifically.

After three more lockdowns this year, average lease lengths across all commercial sectors in Victoria have dropped from 2.49 years in March 2021, to now 2.28 years.

Queensland average lease lengths across all commercial sectors reached a peak of 2.19 years in September 2020, before dropping to 1.97 years by August this year.

Surprisingly, despite a long lockdown, New South Wales has shown resilience with lease lengths across all commercial property sectors improving this year overall, growing from 1.74 years in February to 1.95 years in September.

On the industrial property front, there was some uplift in confidence in Victoria before lease lengths fell again during the latest lockdowns.

In September 2020, average lease lengths in Victorian industrial property were sitting at 1.68 years, before reaching a high of 2.05 years in March 2021 when there was some reprieve from COVID. However, after three more lockdowns this year, this figure has fallen back to 1.84 years.

Recovering from a low of 1.43 years in July 2020, average lease lengths for Queensland industrial property climbed to a peak of 1.94 years in February 2021, but have since settled to be at 1.75 years for September.

The NSW industrial property average lease length has dropped from 1.89 years in June 2020, to a low of 1.33 years in March 2021, and has since recovered a little to be at 1.51 years in September.

Tom Wallace, CEO of Re-Leased said, “Although Australian people and businesses can see the end of lockdowns in sight as vaccination rates increase, these figures demonstrate there’s been a jolt in business confidence over the past year to commit to longer lease lengths in the overall commercial property market.”

“Contrary to the current strength of the industrial market, it is clear confidence in industrial property lease lengths have still taken a hit, particularly in New South Wales. The volatility in Victoria and Queensland also points to this lingering uncertainty.”

Re-Leased is a cloud-based commercial property management software that makes life easier for property managers and owners. The Re-Leased data covers about 21,000 commercial properties across Australia, comprising about 45,000 tenancy agreements.