- Cushman & Wakefield’s quarterly Office Marketbeat reveals an 8% year-on-year rise prime office rents
- Adelaide CBD prime net increase moves rents per sqm from $255 to $264, quarter-on-quarter
- There is a high demand for A-grade property stock in Adelaide
In line with most of Australia’s CBD office markets, Adelaide saw prime net effective rents continue to push higher in the first quarter of 2023; Cushman & Wakefield’s quarterly Office Marketbeat reveals a 3.5% quarter-on-quarter uplift in Adelaide.
Adelaide CBD prime net increase moves rents per square metre from $255 to $264. The shift equates to a YoY increase of 8.0%.
Net absorption, overall vacancy (6 monthly)
Cushman & Wakefield’s Head of Research Australia and New Zealand, Dominic Brown, said demand for office space across Australia’s largest office markets remains stable.
“We’re seeing prime CBD office rents continue their upward trajectory in most markets across Australia, with Sydney setting the pace in the new year,” Brown said.
According to the Office Marketbeat report, there is strong demand for high-quality properties in the Adelaide CBD market, with the major deals during the quarter consisting of pre-commitments for upcoming buildings.
The consolidation of incentives in A-grade properties indicates that the market has ample high-quality properties. Despite the availability of various tenant options across Adelaide, there is still a high demand for this type of property.
“Tenants are more discerning given the uncertain economic conditions, and incentives remain higher as a result,” Brown explained.
Supply pipeline
The supply of new office stock in Adelaide has been somewhat volatile over recent years, but the outlook is strong.
2019 and 2020 saw two consecutive years of circa 30,000 sqm of additional stock each year. 2021 followed with no significant additions.
New stock was strong again in 2022. Adelaide saw the addition of office towers at 83 Pirie Street, the new home of the Department of Planning, Transport and Infrastructure (DPTI), consolidating from seven CBD locations.
Supply pipeline: new developments & major refurbs
Charter Hall is set to release its 40,000 sqm tower located at 60 King William Street to the market in 2023, with Telstra and Services Australia already secured as pre-committed tenants. The notable increase in net absorption levels seen in Adelaide’s CBD’s better-quality stock demonstrates the tenants’ inclination towards quality properties.
