Market reports

As Victoria comes out of another lockdown the already increasing vacancy rate of 10.4% as of July 2021 is likely to continue into 2022. Even with the easing of restrictions, the high case numbers are likely to remain a deterrent to workers returning to the office for the remainder of the year.

Brisbane CBD’s vacancy remained relatively unchanged over the 6 months to July 2021, decreasing from 13.6% to 13.5% for a change of only 0.01%. This was a result of landlords providing attractive leasing terms to entice tenants to commit and the relatively minor length of lockdowns in Queensland allowing businesses to experience minimal disruption and operate as normally as possible. It is likely however that the vacancy rate will stay above 10% until at least 2025.

With Western Australia experiencing a limited downturn as a result of the pandemic, the vacancy rate has declined from 19.9% as of January 2021 to 16.8% in July 2021. A reduction of 3.1%, which is the largest decline in the vacancy rate experienced in Australian CBD markets in 2021. The vacancy rate as of July 2021 has been reduced by a mixture of higher net absorption and withdrawal of stock.

Vacancy in the Adelaide CBD was largely unchanged in July 2021, falling slightly to 15.7% from 16.0% as at January 2021. Landlord incentives have also stabilized and sit at an average of 37% to 42% for old generation (pre1990) A Grade buildings, and 35% to 38% for new generation (post 2004) A Grade buildings.

Brisbane CBD’s vacancy remained the same over the 6 months to July 2021, decreasing from 13.6% to 13.5% for a change of only 0.01%. The vacancy rate mainly remained unchanged for several reasons, including attractive leasing terms by landlords to entice tenants to transact and the relatively minor length of lockdowns in Queensland allowing businesses to operate as normally as possible. It is likely however that the vacancy rate will stay above 10% until at least 2025.

The Melbourne CBD has been greatly impacted by the pandemic, especially with the frequency and length of lockdowns disrupting normal business practises. As a result, in the first half of 2021, we saw another increase in the vacancy rate, increasing by 2.0% to 10.4% in the 6 months to July 2021.

The office market vacancy rate for Sydney CBD has increased for the third consecutive 6-month period from 8.6% to 9.2% in the six months to July 2021. This is now the highest vacancy rate since January 2012.

The office market vacancy rate for Sydney CBD has increased for the second consecutive 6-month period from 5.6% to 8.6% in the six months to January 2021 due to limited demand. The forecast in the CBD office market is that vacancy will continue to increase throughout 2021 as businesses adapt and change their workplace strategies, looking at minimising their office requirements as a result. More sublease space has become available as a result.