Office rents in the central business district (CBD) of Sydney strengthened 2.5 per cent in the second quarter to A$403 (about HK$2,281) per square metre per annum, says Jones Lang Wootton (JLW). The rents represented a large increase of 10.4 per cent over a year earlier, JLW's latest Asia Pacific property market review reported. It said the completion of uncommitted new supply resulted in a marginal rise in total stock vacancies to 7.2 per cent from 7 per cent for the first quarter. Vacancy in grade-B office stock recorded the largest movement, declining from 7.8 per cent to 7.4 per cent, while the western corridor precinct recorded the lowest vacancy rate at 6.2 per cent. In the second quarter, construction activity in the Sydney CBD continued to strengthen, with a further 220,508 sq metres due for completion over 1998-99. On sales, a total of $339.8 million worth of properties were transacted in 11 sales over $5 million in the quarter. Prime CBD yield declined 0.25 per cent to range between 6 per cent and 7.25 per cent, JLW said. In Melbourne, office vacancies continued to drop, falling one percentage point to 16.7 per cent, it said. Prime rents remained stable, averaging $116 per square metre per annum on net area. Net absorption of offices for lease totalled 6,563 sq metres in the second quarter. Total sales of office properties increased sharply to $129.5 million. Prime yields were stable, ranging between 6.75 per cent and 9.5 per cent. JLW said about 83,103 sq metres of office space was under refurbishment, with 29,845 sq metres to be completed by late in the year. Leasing activity for office space in Auckland's CBD fell by about 50 per cent in the second quarter but there were no completions or starts of office projects, it said. The total stock vacancy rate in the CBD dropped from 10.8 per cent to 9.2 per cent in the first half of this year. Prime CBD rentals in the second quarter remained firm at NZ$160 (about HK$788.46) per sq metre to $240 per sq metre per annum, it said. Investment activity for office buildings in the CBD consolidated in the quarter, with yields for prime CBD offices steadily softening to the range of 7-9.25 per cent and for secondary CBD offices to 9.25-11 per cent.