CBD vacancy rate increases from 11.4% to 12.1%.
Expansions by smaller tenants have been offset by large consolidations in the financial sector. The “core” has the lowest vacancy rate of all the CBD precincts, at 9.5%.
Flight to quality, CBD & core
The flight to quality trend continues, with small-medium tenants pursuing higher grade space. Furthermore, many tenants are migrating to the CBD, and especially to core CBD locations. This is lowering vacancy rates in the most central CBD locations compared
to the surrounds.
Third spaces – an important factor in building selection
“Third spaces” are communal spaces, beyond the tenancy e.g. larger meeting rooms and informal lounges. They are becoming a critical point in selecting future premises for small–medium tenants, who want to avoid paying for large meeting rooms that are under-utilised.
Backfill vacancy opportunities
Some significant large tenants – especially in the finance and government sectors – are consolidating, releasing excess floor space to the market. This trend is likely to continue for the next 2 years. These backfill vacancies create opportunities for tenants who are considering upgrading or relocating.
The office is not dead, it’s changing
As we return to work in 2024, we see more people in the office. However, office attendance is predicted to remain 10%–15% below pre-pandemic levels for the foreseeable future. The focus is on providing staff with positive and productive work environments.
Redefining & redesigning the office
The workplace is in a phase of experimentation, as organisations trial policies, space designs and technology. The trend is to balance “we space” – collaborative space for gathering and creativity – with “me space” – personalised space for focussed work. Organisations must plan space needs based on peak office usage.
Vacancy rates
Sydney CBD – 12.1%
Chatswood – 19.0%
North Sydney – 24.0%
Crows Nest/St Leonards – 26.0%
Macquarie Park – 20.0%
Parramatta – 22.0%
Source: TRS Research
To find out how TRS can get you the best deal on your next lease renewal or office relocation, please contact us.