Market
Pulse
Download the latest Market Pulse, our comprehensive office market report with in-depth analyses of the Sydney CBD and North Shore markets.
Market
Dashboard
A collection of data, charts and insights providing a succinct snapshot of the Sydney office leasing market.
Sydney
CBD
12.2%
Vacancy Rate
as at Jan-24
-104,801
Net Absorption
12 months to Jan-24
1.5%
Rental Growth
A Grade net effective, 12 months to Mar-24
33%-39%
Incentives
Indicative range, as at Mar-24
The arrows indicate the direction of Cadigal’s expected change over the next 12 months.
Vacancy
Rate
The Sydney CBD vacancy rate has risen unabated, from a low of 3.7% in Jul-19 to the current 12.2%.
This is the market’s highest mark in over 28 years.
Rents
Face rental growth and movement in incentives combined to produce effective rental growth of between -1.2% and 7.1%, for the year to Mar-24.
Relative performance across the building grades saw Premium outperforming, with B grade effective rents showing a slight decline.
Tenant Demand
Net Absorption
2023 saw -104,801sqm of net absorption, the third year of negative net absorption in the last five years.
Negative net absorption was recorded across all building grades in 2023 but Premium was the clear outperformer beyond one year, being the only grade to record a positive total for the five years to 2023.
Supply Completions
2019-2028
There were no completions of major office projects in 2024 YTD but 173,875sqm (3.3% of total stock) is due to be delivered by the end of the year.
Supply will be lumpy over the next few years with just 53,916sqm expected to arrive in 2025, nothing in 2026 and then 172,260sqm in 2027.
Tenant
Enquiry
There was 321,770sqm of active tenant enquiry as at Mar-24, up 2% on the previous quarter.
Enquiry is now back to long-term average levels and has remained above 300,000sqm for the last three quarters.
Tenant Enquiry
by Industry Sector
Finance & Insurance tenants are the largest contributors to current enquiry, accounting for 22.7% of the 321,770sqm total.
Together with Information Media & Telecommunications (11.9%) and Public Administration & Safety (10.2%), the top three industry sectors together make up 45% of the total.
North
Shore
24.2%
Vacancy Rate
North Sydney, as at Jan-24
-38,230
Net Absorption
North Shore, 12 months to Jan-24
-1.7%
Rental Growth
North Sydney A Grade net effective, 12 months to Jan-24
34%-43%
Incentives
North Shore indicative range, as at Dec-23
The arrows indicate the direction of Cadigal’s expected change over the next 12 months.
Vacancy
Rate
The vacancy rates in each of the North Shore’s three major precincts rose over the second half of 2023, with North Sydney (24.2%) and Crows Nest / St Leonards (26.3%) hitting new highs.
Rents
Despite soft market conditions, face rents across the North Shore have generally continued to track higher.
However, effective rents mostly fell over 2023 driven by rising incentives across all precincts and building grades.
Tenant Demand
Net Absorption
Tenant demand continues to be weak across the North Shore with a fourth successive year of negative net absorption recorded in 2023.
Negative net absorption was recorded across the North Shore as a whole, as well as in each of the three submarkets, the main North Sydney precinct faring relatively better than the two smaller precincts.
Supply Completions
2018-2027
Following the completion of 88 Walker Street over the second half of 2023, Victoria Cross Tower is the only major office development under construction across the North Shore.
Aside from Victoria Cross Tower (55,318sqm, due in 2025), just one other project is expected to be completed in the next five years – Affinity Place (60,745sqm, 2028).
Tenant
Enquiry
Following three years of substantially low tenant enquiry, the volume of enquiry interested in the North Shore rose 78% over H2 2023, to 186,418sqm.
Tenant Enquiry
by Industry Sector
A breakdown of current enquiry by industry sector shows Information Media & Telecommunications to be most dominant, contributing 28.3% of the total.
However, North Shore tenant enquiry is quite diverse with only two sectors – Manufacturing (18.1%) being the other - accounting for more than 10% of the total.
