Market reports

Auckland CBD’s vacancy rate has gone against the trend of increasing since early 2020, currently sitting around 10.0% overall, from 11.9% as at July 2021. Whilst the pandemic shifting nature has caused an increase in work-from-home and has prohibited offshore business partners from travelling to New Zealand, there is evidence to suggest that the outlook for 2022 is likely to involve an office presence for many businesses. Especially once international travel recommences.

With Western Australia experiencing a limited downturn because of the pandemic, the vacancy rate has continued to decline from 16.8% as of July 2021 to 15.0% in January 2022. A reduction of 1.8%, continuing from the 3.1% drop in vacancy experienced in the first half of 2021 which was for that period 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 across the Adelaide CBD decreased from 15.7% to 14.5% in January 2022, highlighting the buoyancy in the market and continued acceleration of tenants seeking better quality space. This has resulted in a further 2 office developments commencing construction, bringing the total to four under construction and another close to securing necessary tenant precommitment.

Brisbane CBD’s vacancy experienced an increase overthe 6 months to January 2022, increasing from 13.5% to 15.4% for a change of 1.9%. Although the first 6 months of 2021 saw an uptick in the leasing activity, transactions in the second half dropped off significantly as the Omicron variant forced workers back to working-from-home full time and put a hold on major leasing transaction activity.

As Melbourne’s office workers re-emerge from remote working arrangements due to the extensive lockdowns in 2021, the vacancy rate of the CBD continued to increase slightly to 11.9% as of January 2022. Even with the easing of lockdown restrictions, the high case numbers have remained a deterrent to workers returning to the office for the start of the year.

For the fourth consecutive 6-month period, the office market vacancy rate for Sydney CBD has increased. For the six months to January 2022 the vacancy rate increased from 9.2% to 9.3%. This is now the highest vacancy rate since January 2012. With the end of lockdown, it is expected that the vacancy rate will begin to decrease into 2022.

For third consecutive 6-month period, the office market vacancy rate for Sydney CBD has increased. For the six months to July 2021 the vacancy rate increased from 8.6% to 9.2%. This is now the highest vacancy rate since January 2012. With the end of lockdown, it is expected that the vacancy rate will begin to drop over the coming periods into 2022.

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.