The Adelaide market has seen some cautious optimism return, following an extended period with no community transmission of COVID-19 in South Australia. This has seen an increase in leasing activity, particularly for sub 500 sqm tenants in non-CBD locations. These smaller tenants are in a position to pivot quickly and take advantage of a tenant favourable market. Recent outbreaks at the time of publishing are expected to dampen this optimism somewhat, however the situation is evolving daily.
Brisbane CBD’s vacancy rate remains at 12.9% as of July 2020. The vacancy does not reflect the overall decrease in occupancy rates for buildings nor does it consider subleases that are entering the market. The state border closures has somewhat hampered tenant confidence, however government sectors are expected to help the recovery.
Vacancy in Melbourne’s CBD has climbed by almost half to 5.8% as of July 2020. This increase in vacancy has come as a result of Covid-19 and the government mandated lockdowns that have impacted the utilisation of office buildings and forced a change in working patterns.
The office market vacancy rate for Sydney CBD has increased from 3.9% to 5.6% in the six months to July 2020 due to limited demand. The forecast in the CBD office market is that vacancy will continue to increase over the rest of 2020 and into 2021 as businesses change their work patterns and look at minimising their office requirements as a result. Subleasing has become more prevalent in the market as a result with some tenants re-cutting leasing deals to take up a small footprint.