04 Aug 2022Property Council of Australia
A flight to quality in Sydney office space has seen a rise in Sydney CBD office vacancy rates in the Property Council of Australia’s latest bi-annual Office Market Report.
Property Council’s Executive Director Luke Achterstraat said the increase from 9.3% to 10.1%, after remaining at 9.3% for 12 months, was predominantly due to an increase in supply in the past six months.
“These latest results paint a positive picture for the outlook of our Sydney CBD, given the surrounding pressures of COVID, industrial action, floods and work from home flexibility,” Mr Achterstraat said.
“Whether each office requires one, three or five days with colleagues, the demand is strong for face-to-face interaction with Sydney witnessing a two per cent rise additional office supply.”
“The office market continues to defy previous dire predictions showing a strong flight to quality with a sharp rise in premium office space demand,” he said.
“International capital is voting with its feet, citing our office markets as some of the safest havens for investment in the region.
“Parramatta continues to prosper with vacancy increase being due to the higher than normal large supply addition due to the completion of 8PSQ. Tenant demand was also positive despite the large office stock addition.”
Mr Achterstraat said while the office market had proven to be resilient and demand is in positive territory, NSW CBDs still needed attention.
“While demand for space is increasing, the number of actual office workers in our Sydney CBD is well below pre-pandemic levels and threatens the ecosystem of cafes, restaurants and retailers that help make our CBDs such special places,” he said.
“The recovery in our CBD needs to be top of mind for governments and businesses even as we deal with elevated levels of COVID-19 in the community.”
