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
11.5%
Vacancy Rate
as at Jul-23
-59,911
Net Absorption
12 months to Jul-23
1.4%
Rental Growth
A Grade net effective, 12 months to Jun-23
33%-38%
Incentives
Indicative range, as at Jun-23
The arrows indicate the direction of Cadigal’s expected change over the next 12 months.
Vacancy
Rate
The overall CBD vacancy rate continues its upward trajectory, rising 0.2% over the 6 months to Jul-23 to 11.5%, the rate of increase slowing compared to the previous two periods.
Rents
Face rents in the CBD grew 3.1%-4.7% over the 12 months to Jun-23, representing slower growth than the previous quarter.
Movement in incentives has resulted in effective rents performing similar to face rents for Premium and B grade but softening in A grade incentives acted as a drag on A grade effective rental growth.
Tenant Demand
Net Absorption
The CBD recorded -40,173sqm of net absorption over the first half of 2023, completely cancelling out the +36,183sqm tallied over the previous two years.
Supply Completions
2018-2027
There is 261,324sqm of office space currently under construction across eight major developments, equal to 5% of total stock.
Just 7.5% of this is due to be completed in 2023 with the majority (59%) set to be delivered over 2024.
Tenant
Enquiry
There was 291,650sqm of active tenant enquiry as at Jun-23, up 7% over the previous quarter.
Despite the rise, current enquiry is still 11% below the average of the last 11+ years.
Tenant Enquiry
by Industry Sector
Financial Services tenants currently make up the largest proportion of tenant enquiry (18.4% of the total), followed by Legal Services (16.6%) then Public Administration and Safety (13.5%) and Information Media and Telecommunications (13.4%).
All four industry sectors have large footprints in the Sydney CBD office market.
North
Shore
22.7%
Vacancy Rate
North Sydney, as at Jul-23
-26,381
Net Absorption
North Shore, 12 months to Jul-23
-2.7%
Rental Growth
North Sydney A Grade net effective, 12 months to Jun-23
34%-42%
Incentives
North Shore indicative range, as at Jun-23
The arrows indicate the direction of Cadigal’s expected change over the next 12 months.
Vacancy
Rate
Whilst Chatswood’s vacancy rate fell over H1 2023 (to 16.1%), vacancy rates in both North Sydney (22.7%) and Crows Nest/St Leonards (24.3%) rose and remain amongst the highest in the country.
Rents
Face rents grew between -3.8% and +7.0% in the 12 months to Jun-23, with North Sydney seeing the strongest growth and Crows Nest / St Leonards the weakest.
The combination of mixed face rental growth and rising incentives has resulted in effective rents mainly falling across the North Shore office market.
Tenant Demand
Net Absorption
Tenant demand, in terms of net absorption, remains very weak across the North Shore.
Following three consecutive years of negative net absorption over 2020-2022, another -13,830sqm was recorded over H1 2023.
Supply Completions
2018-2027
Total North Shore supply increased by 2.0% (30,891sqm) over the first half of 2023 with no stock withdrawals, raising total supply to 1.56mil sqm.
Major office projects completed this year include 558 Pacific Highway in St Leonards (16,738sqm of office NLA) and 2 Blue Street, North Sydney (14,153sqm).
Tenant
Enquiry
Tenant enquiry considering the North Shore remains extremely low, with just 53,382sqm of active enquiry recorded as at Jun-23, a 9.5% drop from 6 months prior.
Tenant Enquiry
by Industry Sector
Current enquiry is led by Construction-related tenants comprising 15.9% of the total followed by Wholesale Trade (13.1%) in a very small sample.
