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

9.3%

Vacancy Rate

as at Jan-22

33,111

Net Absorption

12 months to Jan-22

0.2%

Rental Growth

A Grade net effective, 12 months to Mar-22

31%-35%

Incentives

Indicative range, as at Mar-22

The arrows indicate the direction of Cadigal’s expected change over the next 12 months.

Vacancy
Rate

Source: Property Council of Australia

The overall vacancy rate in the Sydney CBD held steady over H2 2021 to be 9.3%, as at Jan-22.

The vacancy rate is 60 basis points above the long-term average and was last at current levels 10 years ago.

Static net supply combined with no material change in vacant area led to the unchanged vacancy rate.

Rents

Static face rents and further increases of incentives combined to see effective rents fall 1-5% over the course of 2021.

However, effective rents have now returned to growth, rising 0.5-3.5% in the 6 months to Mar-22.

Source: Cadigal Research

Tenant Demand
Net Absorption

Net absorption, has been weak in the CBD for an extended period of time (well before COVID) with -84,874sqm tallied over the last 5 years and the long-term annual average not having being exceeded since 2015.

However, demand rebounded strongly in 2021 from the -110,346sqm of net absorption in 2020, recording 33,111sqm and averting a third consecutive year of negative net absorption.

Supply Completions
2016-2025

Three new projects, totalling 160,300sqm, are set to be delivered before the end of this year.

Beyond 2022, just 19,238sqm is expected to complete in 2023 before two towers above the Martin Place Metro Station arrive in 2024.

Source: PCA/Cadigal

Tenant
Enquiry

Source: Cadigal Research

The rebound in tenant enquiry witnessed over Q3 and Q4 2021 was unwound in the first quarter of 2022, the quantum falling 17% as several large enquiries came to a conclusion.

After briefly returning to long-term average levels tenant enquiry has, once again, fallen substantially below the average.

Tenant Enquiry
by Industry Sector

Enquiry continues to be led by three industry groups - Public Administration & Safety, Finance & Insurance and Information Media & Telecommunications - together accounting for 50% of the total.

Public Admin & Safety enquiry is currently overweight compared to its Sydney CBD footprint as a result of several large active enquiries from Commonwealth and State government entities.

Source: Cadigal Research

North
Shore

16.6%

Vacancy Rate

North Sydney, as at Jan-22

-13,217

Net Absorption

North Shore, 12 months to Jan-22

3.0%

Rental Growth

North Sydney A Grade net effective, 12 months to Dec-21

32%-37%

Incentives

North Shore indicative range, as at Dec-21

The arrows indicate the direction of Cadigal’s expected change over the next 12 months.

Vacancy
Rate

Source: Property Council of Australia

The vacancy rate in the North Shore's key precinct, North Sydney, sits at 16.6% having remained relatively unchanged for 12 months.

The North Sydney vacancy rate has not been at these elevated levels since Jan-93.

Rents

Effective rents across the North Shore have witnessed moderate rises in A and B grade stock, with Premium seeing stronger growth, over the 12 months to Dec-21.

Source: Cadigal Research

Tenant Demand
Net Absorption

Net absorption continues to be weak across the North Shore, with -13,217sqm recorded over 2021, the second successive year of negative net absorption.

North Sydney continues to outperform both Crows Nest / St Leonards and Chatswood on the back of new high-quality supply, attracting larger occupiers from Macquarie Park and smaller metropolitan markets.

Supply Completions
2016-2025

After the market expanded by 9% in 2020 as a result of new supply, 2021 was a relatively quiet year for supply with total stock increasing by just 0.6%.

2022 is expected to deliver just one major completion, a mixed-use development comprising 252 hotel rooms and 13,600sqm of office space in North Sydney.

Source: PCA/Cadigal

Tenant
Enquiry

Source: Cadigal Research

Active tenant enquiry on the North Shore fell to 85,390sqm over the first half of 2021, driven by the reluctance of larger tenants to come to market.

However, enquiry rebounded over H2 2021, jumping 50% to 128,285sqm as at Dec-21. Despite the bounce, the quantum of active enquiry is still some 30% below the 5-year average.

Tenant Enquiry
by Industry Sector

Public Administration & Safety is currently the largest industry sector, by far, for tenant enquiry contributing 38% of the total. All other sectors account for less than 9% each.

Source: Cadigal Research

For more information
Contact

Lok So

Research Director

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