- National sublease availability decreased only slightly by 0.4% in the final quater of 2021
- Relative stability predicted to remain throughout 2022
- Perth and Adelaide saw greatest reductions in sublease availability
The final quarter of 2021 was marked by stability in Australia with National sublease availability decreasing only slightly by 0.4% from the previous quarter, according to CBRE‘s Sublease Barometer for Q4 2021.
This figure represents a 19.42% reduction throughout 2021 as availability shifted from just under 426,000sqm in December 2020 to reach approximately 343,241sqm at last years end.
CBRE’s Head of Investor Leasing for the Pacific, Mark Curtain, predicts the stability will remain during the year.
“There is no doubt that a sense of stability entered the sublease market throughout 2021.”
Mark Curtain, CBRE Head of Investor Leasing Pacific
“While we anticipate mild fluctuations throughout the course of 2022, as larger corporate occupiers start to implement their long term office accommodation strategies, the downward trend of [availability in] the national sublease market will continue.”
This is a sentiment mirrored by David Cannington, Head of Research & Strategy at Investa, who believes Australia’s major CBD office markets are primed to rebound in 2022.
Australian CBD Sublease Availability
A closer look at the CBDs
The decline in national commercial sublease availability in the December Quarter was driven by Perth and Adelaide. Benefiting from low COVID cases, the two CBDs registered reductions of 41.3% and 42.7% QoQ respectively. This marks the lowest level of sublease availability for both markets since June 2020.
During the same quarter, Brisbane remained largely unchanged. Availability is at a three-year low of under 25,000sqm. CBRE Director of Office Leasing in Brisbane, Chris Butters, does not anticipate any significant rise in availability for the market during 2022 as he believes the city is entering a growth phase.
Sydney and Melbourne’s CBDs, however, saw 10.7% and 3.7% additional office space on the sublease market respectively during the quarter. This change followed extended lockdowns throughout the prior quarter during which many usual city workers found themselves working remotely.
“Melbourne’s sublease supply is still the largest in the country with 192,588sqm, representing 56% of total availability,”
Mark Curtain, CBRE Head of Investor Leasing Pacific
“It is likely to headline the national sublease recovery in 2022 with strong supply led deal activity, as opportunistic tenants take advantage of favourable financial arrangements,” Mr Curtain said.
Sublease Availability by Market
As leasing sentiment improves and Covid restrictions ebb in most parts of the country, sublease occupiers will be able to more clearly implement real estate strategies.
CBRE expects that this will mean although sublease availability is likely to remain fluid, it will continue to contract throughout the year.
