- Brisbane to require over 265,000 square metres more office space across the next decade
- Sydney and Melbourne rents are stable
- Vacancy rates have are also steady
Cushman and Wakefield’s latest Marketbeat reports for the east coast CBD office markets show vacancy rates starting to flat line just under or in the early double digits, and circa 500,000 square metres of office either completed or expected to come online this year.
Brisbane CBD
The vacancy rate is currently 13.5% for the Brisbane CBD, with premium vacancies at 6.7%, A-grade 19.7%, and B-grade 13.3%.
Gross effective rents were stable across last year and Q1 this year, according to the report, and is averaging $560 per square metre per annum. for premium grade stock, up 3.1% over the quarter.
A-grade and B-grade also saw uplifts in rents, $425 sqm pa and $345 sqm pa respectively, and up 2.6% and 0.9% respectively.
The report predicts the Brisbane office market will need 265,000 square metres more office floorspace as 26,500 new office employees hit the CBD across the next decade. Some 195,000 square metres is either completed or due for completion.
Prime gross effective rent, overall vacancy (six monthly)
Sydney CBD
Vacancy rates have been floating around 9.3% with the report noting “leasing activity remained solid and incentives generally stable in Q2 2022.”
Prime gross effective rent, overall vacancy (six monthly)
Prime rents have moved up 1.3%, with the flight to quality still climbing and yet to reach cruising altitude. The report found premium gross gace rents averaged $1,510, with A grade at $1,300, and B grade $1,030; prime grade (combined premium and A grade) was $1,385 per square metres per annum.
The report also said over 210,000 square metres of new and refurbished space is expected to come online in the Sydney CBD across this year, with the majority of that (65%) pre-committed.
Quay Quarter Tower will be key to the above figure, comprising 88,000 square metres, and Salesforce Tower with 54,000 square metres.
Of note, the report said concerns surrounding inflation and the recent extreme weather events have pushed consumer confidence to the lowest levels since 2020, however business confidence and conditions “… remain rooted in expansionary territory.”
Melbourne CBD
The latest vacancy rate figures for the entire CBD market is 11.9%, with the breakdown seeing premium at 7.2%, A-grade 14.2%, and B-grade 13.7%.
Prime gross effective rent, overall vacancy (six monthly)
Cushman and Wakefield’s report said net face rents for the CBD market is stable, with stock added or refurbished across the prior years: 351,900 square metres in 2020, and 200,000 square metres in 2021. The report said “Most of the stock expected to enter the market this year is refurbishment.”
