LOWER SYDNEY RENTS.

New Zealand Herald, Volume LXVII, Issue 20721, 14 November 1930, Page 7

LOWER SYDNEY RENTS.

SEQUEL TO DEPRESSION. ALLROUND REDUCTIONS. FROM 25 TO 33 PER CENT. The last few months of economic depression have made a radical difference to the receipts of property holders in the Sydney metropolitan area, and particularly the central shopping district of the city. At present the position as a whole is somewhat obscure, because agents are dealing with individual cases on their merits, in many instances relieving lessees according to the degree by which they have been hit by the slump. An inquiry reveals, however, says the Sydney Morning Herald, that reductions in rents in general are averaging between 25 and 33 1-3 per cent. The prevailing impression among city property owners is that readjustments in the level of rents are inevitable, and that the position will stabilise itself to meet current circumstances. With tho boom in property prices a few years ago, shops ami offices were lot at rates which were often abnormal. Money was plentiful, and there was enough confidence to induce business pcoplo to agree to heavy rentals which were not always justified. Now there is a general tendency, proportionate to the slackening in business, to look for lower rentals. Landlords havo been obliged to come to terms so as to keep premises occupied. Competition is all the more severe because of the blocks of city buildings completed for letting purposes just as the depression camo on. In most cases arrangements have been made for a temporary reduction with the idea of reviewing tho position in three, six, or twelve months' time. Elsewhere old tenants are , being accommodated on generous terms. Return to the 1924 Level. Tho writer says:—"lt is generally agreed that a return is being made to the level of rents which ruled in 1924. That year is regarded as representing a period of normality under modern conditions in Sydney. The following year saw tho beginning of speculation. Properties were bought at high prices which found ready buyers in spite of many doubting conservatives. A large number of these city premises were cut up into small shops, with slender accommodation for stock and display purposes. This period lasted until about twelve months ago when traders began to feel tho pinch. "It is estimated that in 1924 the average weekly rental per foot frontage was something like £2 for shops in tho popular portion of King Street and adjacent streets. During the boom period that followed, when premises were cut up into smaller shops, rents soared to double that figure, and even touched £6 a foot frontage. On top of that, there was a heavy rates and taxes bill which amounted to £SOO a year for shops with 18ft. frontages in King Street. These high rentals aro now readjusting themselves, and there aro instances of shops in the more popular part of George Street being let for rents almost as low as in 1924, having reached fully double tho figure in the intervening years. Tho reductions in most cases throughout tho chief shopping centre are, however, generally quoted as being in the region of from 25 per cent, to 30 per cent. Offices and Flats Rentals. "Rents for offices in tho city and for flats have similarly had to bo readjusted to tenants who aro suffering from hard times. Here, again, it is misleading to base assumptions on prevailing figures in rolation to those in force xluring the boom period. In many cases, especially flats, tho quotod rent during the prosperous years did not always represent the actual sum paid b3' the person in possession. Moreover, extremely high rents could bo asked, and were frequently secured, at a time when occupants had no fear for the morrow. "Many small flats are being let to-day at a rate-50 per cent, below the sum they brought in two or three years ago, but their proprietors are often" forced to admit that the present rent is more reasonable than the old. Second mortgagees, however, are suffering severely with the heavy fall in the buildings' earning capacity. "Tho position of owners of city offices is, naturally, aggravated by recent building operations. Tho appearance on the market of new office blocks frequently meant that tempting rents were possible which lured tenants from their old offices, thus stimulating competition. The disappearance of several importers from the principal commercial areas of the city has assistod in the movement for lower rents, while many professional men—doctors and lawyers in particular—have been forced to demand rentals that aro more in line with their depleted incomes. Accordingly, separate temporary arrangements are being made in numerous cases to accommodate these people during the period of depression."