CBRE Office Report
CBRE’s Sublease barometer report looks at sublease and rental activity across Australia. Image – CBRE.
  • First-quarter results reflect the growing confidence of Australia’s office occupiers
  • Subleasing activity remains high, but is predicted to fall in latter part of 2021
  • Around the capital cities, net face rents (NFR) are holding steady

First-quarter results reflect the growing confidence of Australia’s office occupiers, with indecision and caution – hallmarks of the pandemic – starting to leave the market.

According to new research from global commercial agency CBRE, sublease availability across the nation is currently totalling 417,030sqm; however, new sublease additions have begun levelling out from previous peaks in all markets.

Sublease availability still remains high however, particularly in Melbourne and Sydney. Adelaide recorded the largest fall (-24%). Sydney also fell (-6.5%) but there were increases in Brisbane, Melbourne and Perth.

Sublease availability, March Quarter 2021

Sublease availability Mar2021
Source: CBRE Research

CBRE expects the sublease availability market to peak in the middle of the year and then ease away. It could even get back to pre-pandemic levels.

“The challenge of future workplace occupancy remains on the agenda, with the emerging trend in hybrid workplace models – a trend that will see occupier’s future real estate portfolios defined by flexibility, in terms of workplace format as well as lease terms,” said CBRE’s Head of Office Leasing for Pacific, Mark Curtain.

“An increase in desk ratios could also have a positive effect on sublease withdrawals as occupiers readjust their use of office space and initial expectations of space reductions are diminished.”

Companies say that subleasing is expanding due to contraction in the market, as well as businesses consolidating and relocating.

Enquiries are rising, however, especially in the larger space, which is why CBRE believes there will be a reduction in the total subleasing space towards the end of 2021.

“The first quarter of 2021 has been very positive from an enquiry point of view, with organisations having the confidence to assess and make decisions on their office strategy for the medium- to long-term. This level of enquiry has resulted in strong levels of transactions in the sub 500sqm with momentum building in the 1,000sqm to 6,000sqm size range.”

Tim Courtnall, CBRE State Director, Office Leasing, NSW

Around the States

Tenant demand plummeted to historical lows in 2020, for understandable reasons. Some capital cities have since recorded double-digit rebounds.

CBD Office Prime Net Effective Rent Index

CBD Office Prime Net Effective Rent Index
Source: CBRE Research
  • Sydney’s prime and secondary net face rents (NFR) held steady in Q1, whilst prime and secondary incentives increased;
  • Melbourne prime and secondary NFR remained unchanged in Q1 whilst incentives increased to 37% for prime and 36% for secondary;
  • Brisbane prime NFR remained stable in Q1 whilst incentives increased to 40%, resulting in a 2.3% decline in NER over the quarter, compared to a 4.2% decline in Q4 2020;
  • Adelaide’s prime and secondary NFR remained stable in Q1. Prime incentives remained unchanged in Q1 while secondary incentives increased marginally to 37.6%. Adelaide’s office market has remained relatively healthy since the COVID-19 outbreak;
  • Perth’s economic fundamentals and activity are positive off the back of mobility of goods and people, and a strong mining sector, with leasing volumes poised to improve as 12-month renewal periods from early 2020 begin to close in again;
  • Canberra prime NFR remained unchanged in Q1 with secondary NFR increased marginally by 0.7%.


Report: Sublease Barometer – Australia CBD, CBRE. March 2021.

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