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

9.2%

Vacancy Rate

as at Jul-21

-24,402

Net Absorption

12 months to Jul-21

-6.5%

Rental Growth

A Grade net effective, 12months to Sep-21

30%-37%

Incentives

Indicative range, as at Sep-21

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 moved up further over H1 2021, to 9.2%.

After coming within 0.1% of the lowest mark on record, the vacancy rate has now risen 550 basis points in 24 months.

Rents

Since peaking in Dec-19, effective rents have fallen for 21 months as incentives spiked up during 2020.

However, the rate of decline in effective rents has slowed in 2021 vs 2020.

Source: Cadigal Research

Tenant Demand
Net Absorption

* 6 months to July
Source: Property Council of Australia

Tenant demand remains weak with the market averaging negative net absorption over the last 1, 2 and 5 years.

However, 27,269sqm of net absorption was recorded over H1 2021, the first positive result in 2 1/2 years.

Supply Completions
2016-2025

There were 67,431sqm of net additions to stock over H1 2021, following on from the 104,179sqm added in the prior 6 months.

As a result, the size of the CBD market has grown 3.4% in the last 12 months to 5.15mil sqm, the highest level on record.

Source: PCA/Cadigal

Tenant
Enquiry

Source: Cadigal Research

Tenant enquiry rebounded over Q3 2021, up 19.2% on the previous quarter, to 295,800sqm.

Despite the latest rise, enquiry levels remain below the 10-year average.

Tenant Enquiry
by Industry Sector

Public Administration & Safety and Finance & Insurance are currently the largest industry sectors for enquiry, each contributing about 16% of the total.

They are closely followed by Information Media & Telecommunications at 14%, with no other sectors above 10%.

Source: Cadigal Research

North
Shore

16.4%

Vacancy Rate

North Sydney, as at Jul-21

5,728

Net Absorption

North Shore, 12 months to Jul-21

-13.7%

Rental Growth

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

33%-37%

Incentives

North Shore indicative range, as at Jun-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 16.4% having eased down 0.1% from 6 months prior.

The vacancy rate is expected to fall more materially over the near term due to a number of leases recently signed but yet to commence.

Rents

Effective rents across the North Shore bottomed out around Q4 2020, as rising incentives slowed substantially and some face rents grew again.

But, despite a mild recovery in 2021 effective rents are still about 15%-25% down from pre-COVID peaks.

Source: Cadigal Research

Tenant Demand
Net Absorption

* 6 months to July
Source: Property Council of Australia

Net absorption has been weak across the North Shore, with -6,290sqm recorded over H1 2021 following the -39,787sqm sqm totalled over 2020.

Led by the completion of 1 Denison in Q4 2020, North Sydney has outperformed both Crows Nest/St Leonards and Chatswood in terms of net absorption recording positive net take-up over 6, and 12, month periods.

Supply Completions
2016-2025

The slow contraction of the North Shore office market has ended with 131,844sqm added to total stock in the last 12 months, growing the market by 9.4%.

Two smaller projects have recently commenced construction but several large developments have been proposed and, if they proceed, will continue to see the market increase in both size and quality of stock.

Source: PCA/Cadigal

Tenant
Enquiry

Source: Cadigal Research

The pandemic has impacted tenant enquiry on the North Shore, resulting in a fall from 171,454sqm as at Jun-20, to 85,390sqm at Jun-21.

The decline has been driven by larger tenants, who have demonstrated a reluctance to come to market due to uncertainty both in the current economic climate as well as their post-pandemic space requirements.

Tenant Enquiry
by Industry Sector

Analysing North Shore tenant enquiry by industry sector shows Finance & Insurance to be the largest contributor at present with 21% of the total.

Whilst Information Media & Telecommunications often accounts for the biggest slice of North Shore enquiry, it is currently a close 2nd at 18%.

Source: Cadigal Research

For more information
Contact

Lok So

Research Director

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