Australian CBD Office Outlook

August, 2018

  • Commercial
  • Research

The outlook for the national office sector is positive

The Australian CBD office markets are at varying places within the property cycle.   Over the three-year outlook from 2018 to 2020, net absorption is expected to remain positive, with the largest annual average expected in the Melbourne CBD. The Melbourne CBD, despite the strong take-up, is expected to see vacancy rise on the back of a large increase in supply.

Sydney CBD is expected to see vacancy rise in 2020  while the remaining markets are expected to see low to moderate supply over the period, resulting in falling vacancy over the three years.  The Brisbane CBD is at the start of a supply upswing, with a number of new projects underway or mooted for development.

Prime face rents are forecast to rise for the listed CBD  markets over the period from June 2018 to June 2021.  Solid, or improving, market fundamentals are set to drive the rental growth.

Investment yields are set to be stable or rise slightly in most CBDs over the three-year outlook. Perth is the main exception with a further slight fall expected over the period.  Foreign investors are expected to continue to have a notable presence in the Australian office market.

^2018 – 2020 *Year to June 2019 to Year to June 2021

Authors

Jennifer Williams

National Director - Research

View Profile > NSW
Andrew Duguid

Managing Director

View Profile > NSW

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