Property Council NSW Executive Director Katie Stevenson said the result showed the Sydney CBD office market was continuing to stabilise, but with tenant demand increasingly concentrated in higher-quality premium buildings.
“Sydney CBD vacancy has moved in the right direction, with no new supply added over the past six months and positive demand continuing to support the market,” Ms Stevenson said.
“The strongest signal is still coming from the premium end of the market, where vacancy fell from 8.9 per cent to 7.7 per cent and demand reached 19,388 square metres.”
Ms Stevenson said the latest results reinforced the ongoing flight to quality across the office sector, with businesses continuing to seek workplaces that support staff attraction, productivity and stronger in-office attendance.
“Tenants are being selective, but they are still making decisions and the buildings that offer the right mix of location, amenity, flexibility and performance are best placed to capture demand,” Ms Stevenson said.
The results across Sydney’s major non-CBD markets remain mixed, with North Sydney vacancy easing slightly to 25.8 per cent, supported by 1,506 square metres of positive net absorption, while Macquarie Park vacancy increased to a record 25.1 per cent following negative demand and new supply over the period.
“North Sydney has held broadly steady, but Macquarie Park is showing the pressure some metropolitan markets are still facing as tenants reassess their space needs and focus on quality,” Ms Stevenson said.
“Across Sydney, the message is clear: office markets are not moving in one direction. Premium CBD stock is attracting demand, some metropolitan precincts are still adjusting, and investment in better buildings and better precincts will be critical to future performance,” Ms Hugo said.
Looking ahead, 179,675 square metres of space is anticipated to enter the Sydney CBD market over the next 18 months, while 327,844 square metres of future space is mooted.
Ms Stevenson said Sydney needed to keep its office pipeline investable and ensure its employment centres remained competitive.
“Sydney’s office market is changing, but it remains central to the productivity and competitiveness of the state. The priority now is supporting investment in the workplaces, transport connections and precinct amenity that businesses and workers expect,” she said.
