Market reports

Brisbane CBD’s vacancy rate, like other major markets continues to rise, increasing from 12.9% to 13.6% over the six months to January 2021. New workplace practises have seen tenants revaluating their current office size requirements in the new year. This has resulted in a large number of tenants handing back additional spaces or putting any excess space on the market for sublease. This is likely to continue over 2021, as businesses fully develop their ideal workplace office and working from home balance.

Vacancy in the Adelaide CBD rose from 14.3% in July 2020 to 16.0% as at January 2021. This was a result of both reduced tenant demand and an increase in new supply. While the Adelaide market has seen some cautious optimism return, major occupiers have looked to consolidate and rationalise their office space due to greater employee work from home flexibility. On the supply side, this was largely influenced from the completion of 108 Wakefield Street (14,500sqm), which began construction prior to the onset of Covid without any tenant pre-commitment.

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.

The office market vacancy rate for Melbourne CBD has climbed because of the Covid-19 pandemic to a new level of 5.8% as of July 2020. This is an increase of 2.6% from Jan 2020 and highlights the effect that Covid-19 has had on the market.

Brisbane CBD’s vacancy rate increased to 12.9% in July 2020. This only minor increase in vacancy does not reflect the overall decrease in occupancy rates for buildings. Large amounts of businesses have allowed their workforces to work from home and this has made occupiers look at subleasing excess space.