- Despite extended lockdown restrictions in Sydney and Melbourne, office leasing availability in Australia’s major cities has plunged to a year low
- According to CBRE’s Q3 2021 Sublease Barometer, the availability of sublease space in the CBDs of Sydney, Melbourne, Perth, Brisbane, and Adelaide fell 9.4 per cent
- Sydney has been the greatest mover, with a 20.9 per cent quarter on quarter fall
- The national sublease market continued to recover during Q3 underpinned by stock withdrawals, a slowing in new sublease availability and an uptick in sublease transactions
Despite lengthy lockdown restrictions in Sydney and Melbourne, office leasing availability in Australia’s main cities has dropped to its lowest level in a year.
According to CBRE’s Q3 2021 Sublease Barometer, the availability of sublease space in the CBDs of Sydney, Melbourne, Perth, Brisbane, and Adelaide fell 9.4 per cent quarter on quarter (QoQ) to little over 344,000 square meters (sqm), after peaking in January at 428,600sqm.
Sydney has been the greatest mover, with a 20.9 per cent QoQ fall, while Melbourne — the Australian city most affected by lockdowns – has had a 1.6 per cent drop in availability.
The national sublease market continued to recover during Q3 underpinned by stock withdrawals, a slowing in new sublease availability and an uptick in sublease transactions, according to CBRE Pacific head of office leasing Mark Curtain.
“Overall, we expect sublease availability to continue to decline in most markets over the coming months as occupier demand increases and as tenant contraction begins to ease,” he said.
According to CBRE’s Barometer, Brisbane’s sublease availability has reached its lowest level since August 2020, while availability in both Perth and Adelaide has been at its lowest level since before the pandemic.
Melbourne continues to have the most sublease space, accounting for 54 per cent of national availability, although robust transaction activity is likely to sustain a gradual drop in supply through 2022.
CBRE Senior Research Analyst Nick Baring said national sublease additions have levelled out in 2021, and businesses that have undergone significant reductions, such as financial services, have seen net absorption increase year-on-year.
“Vaccination rates are continuing to increase, enabling greater business continuity, and this, combined with expansionary activity amongst small-to-mid-sized occupiers and public sector tenants, will help support a further decline in sublease availability throughout 2022.”