IOF's high quality office portfolio has been well positioned to take advantage of the improving market fundamentals, particularly in Sydney. Combined with active asset management, this has delivered Funds from Operations (FFO) growth ahead of expectation and Net Tangible Asset (NTA) growth of 17%.

Historically low interest rates and the lower Australian dollar continue to boost the expansion of the services sector, solidifying the economic transition away from mining-led growth. The domestic labour market and business conditions, particularly for white-collar sectors remain robust.

New South Wales in particular is benefiting from a higher weighting to finance, insurance and business services industries. In addition, a significant pipeline of government infrastructure projects is providing economic stimulus. Victoria shares similar economic fundamentals to New South Wales and accordingly the service sector is expanding, supported by strong business conditions. On the other side of the ledger, lower commodity prices are impacting the mining industry, which has been contracting in Western Australia. Queensland sits in the middle, between the strong performance of New South Wales and the weaker recent performance of the resources-dependent Western Australia.

Finance, insurance and business services industries, which typically drive demand for office space, are currently the best performing sectors in the country. This has translated into a strong demand for office space in Sydney and Melbourne. Leasing activity in Brisbane has seen gradual improvement, recording modest absorption figures, as tenants look to upgrade both asset quality and location. Due to heavy reliance on resources-related industries, Perth continues to face challenges driven by weak commodity prices. Demand remains subdued and tenants are still in contraction mode.

There are common demand themes across all markets. Tenants continue to relocate from fringe locations into the core in all major markets, to varying degrees. In addition, tenants are being forced into the market due to assets being withdrawn for conversion to alternate uses. In many cases, these tenants are using this opportunity to upgrade their accommodation.


  • 597,186 SQM
    Total Lettable area
  • $3.6 Billion
  • 387 TENANTS
  • 4.6
    Energy | water Nabers Rating