Sydney office vacancy tight

The Sydney CBD office market continues to be one of the tightest CBD markets in Australia and has the lowest vacancy rate in over ten years with the vacancy rate dropping from 4.8 to 4.6 per cent in the six months to July 2018 according to the Property Council of Australia’s latest Office Market Report released.

The drop in the vacancy rate is due to withdrawals from the market and positive demand, indicating a strong outlook for the State’s largest office market.

“We continue to see very low vacancy for our CBD office market with the latest report showing 45,122sqm of withdrawals and 45,251sqm added over the period. The Sydney CBD has a high demand for space that needs to be met with future supply,” Property Council NSW Executive Director Jane Fitzgerald said.

“Strong demand was seen in all grades of office space with a particular fall in premium, going from 6.9 to 5.1 per cent and only a very small rise in vacancy in A grade.

“There is a significant amount of badly needed supply coming into the market over the next few years with 29,315 sqm entering the market in the second half of 2018 and 202,248sqm is due to come online from 2020 onwards.

“NSW had five of the top ten markets with the lowest vacancy rates in Australia demonstrating our state continues to foster successful emerging commercial office markets.

“The supply story in our CBD is important, as more supply is required to ensure our CBD is affordable and can still attract international tenants.”

Source: Property Council of Australia