sydney office
Office markets remain strong around Australia, despite working from home and disruption from Covid. Image – Canva.
  • An extra 61,000 sqm was enquired for 3,000-plus sqm spaces during H2 2022 compared to same period last year
  • There was a boost for space below 1,000 sqm
  • Brisbane recorded the highest increases of the major city markets

Demand for office space increased by 11% during the first half of 2022, data from Colliers has revealed.

The same period also saw enquiries for over 1.622 million square metres thanks to a post lockdown appetite for office space, with an extra 61,000 square metres enquiries for 3,000-plus square metre office spaces in H1 2022 compared to H1 2021.

Colliers Office Demand index also revealed that interest in other office size segments increased. There was a 4% boost in enquires for space below 1,000 square metres, and a 22% increase for office space between 1,000 to 2,999 square metres.

Colliers’s Managing Director Office Leasing, Simon Hunt, said the team has witnessed a record amount of demand for office space during the first half of 2022.

“It’s promising to see businesses continuing to engage with the market across all office space sizes.”

On a city-by-city basis, the eastern CBD markets are proving the most popular, with Sydney, Melbourne and Brisbane all witnessing a rise in demand during the first half of the year.

Brisbane recorded the highest increase of the major markets, with a 175% rise in office area enquired for and a 48% rise in the number of enquiries.

“Similar to Sydney and Melbourne, Brisbane tenants are looking for accommodation that will attract their talent back to the office and therefore are seeking high-quality spaces with a prime location and best-in-class amenity,” said Matt Kearney, National Director Office Leasing, Brisbane CBD.

“All markets, segments and industries are experiencing growth as an air of positivity flows throughout the market.”

“Tenants are looking to trade up on quality and location, which is why we have seen a record half year for the Sydney market in terms of demand,” added Cameron Williams, National Director Office Leasing, Sydney CBD.

Enquiries for office space in both the Sydney and Melbourne CBD also indicate that businesses are seeking larger footprints, with these markets recording an 11% and 35% rise respectively, compared to the same time in 2021.

“The major factor driving enquiry is the “flight to quality” as Tenants of all size ranges seek out better quality office accommodation to assist with the return to work story, along with the battle for staff retention and attraction given the competitive labour market,” said Andrew Beasley, National Director Office Leasing, Melbourne CBD.

Enquiries 2020 vs 2021

enquiries 2021 vs 2020
Source: Colliers Int.

Other cities strong

In other markets, Perth also saw an increase in enquires for office space across all segments, with space over 3,000 square metres recording a 266% boost.

“We are finally seeing the premium and A Grade end of the market lifting their face rents and incentives starting to decline,” said Jemma Hutchinson, National Director Office Leasing, Perth.

“It is time to shift the market, and move with the demand.”

The nations capital saw an increase in enquiries for office space below 1,000 square metres – a 34% rise during H1 2022 compared to H1 2021 – suggesting activity from smaller businesses in the government dominated commercial area.

“With the continued return to office trends across the Commonwealth and Territory governments, we are expecting a clear uplift in demand later in 2022 once the Labour Government has had enough time to settle into their new roles,” said Aaron Bruce, National Director Office Leasing Canberra.

Small businesses have driven office space enquiries in Adelaide, with a 25% rise for those seeking spaces under 1,000 sqm.

“Of note is occupier demand for new development (Gen 3) assets as organisations plan for the next generation of new ways of working to remain productive and competitive in all respects,” said James Young, State Chief Executive South Australia.

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