Thursday 6 February 2025
MEDIA RELEASE
Parramatta office market: positive signs amid mixed performance
Parramatta’s office market recorded a slight rise in vacancy rates over the six months to January 2025, reflecting the impact of new supply additions and a challenging demand environment, according to the latest Property Council of Australia Office Market Report.
Property Council Western Sydney Director Ross Grove said the data highlights both challenges and opportunities for Parramatta as it continues its transformation into a key commercial hub for Western Sydney.
“Parramatta’s vacancy rate increased slightly to 20 per cent, up from 19.4 per cent, as over 20,754 sqm of new supply entered the market. While there are positive signs in the upper grades of space, overall demand remains below historical averages,” Mr Grove said.
“The market is seeing clear signs of a ‘flight to quality,’ with strong demand for A-grade office spaces, which recorded 4,606 sqm more space leased than vacated. Meanwhile, B-grade stock also showed resilience with 6,350 sqm more space leased than vacated, but older stock in the C-grade and D-grade segments struggled, recording negative absorption and rising vacancies.”
Mr Grove emphasised that Parramatta’s continued growth as Western Sydney’s economic engine depends on further investment in modern office spaces and active efforts to attract workers back to the city.
“Parramatta is positioned as the centre of Western Sydney’s economic growth, backed by world-class transport and cultural infrastructure, including the Sydney Metro West and Powerhouse Parramatta,” he said.
“However, the rising vacancy in older stock underscores the importance of continued refurbishment and innovation in office design to meet the expectations of tenants. It’s time for businesses and workers alike to fully embrace Parramatta’s potential as a vibrant place to work and grow.”
Key insights from the January 2025 Office Market Report and analysis:
- Vacancy increased from 19.4 per cent to 20 per cent, driven by 20,754 sqm of new supply, offset partially by 8,861 sqm of withdrawals and 3,939 sqm more space leased than vacated
- A-grade spaces saw demand increase, with vacancy rising slightly from 12.9 per cent to 13.3 per cent due to 16,013 sqm of new supply
- B-grade spaces improved, with vacancy falling from 43.8 percent to 41.9 per cent, reflecting 6,350 sqm more space leased than vacated
- C-grade and D-grade stock faced challenges, with C-grade vacancy rising from 18.6 per cent to 22.8 per cent and D-grade vacancy increasing from 6.2 per cent to 7.5 per cent, driven by negative net absorption (more space vacated than leased)
- Future supply remains robust, with 47,222 sqm expected to come online in 2025 and 214,800 sqm mooted for future development.
“Parramatta has the infrastructure, connectivity and vision to support a thriving workforce, but unlocking its potential requires bold action from businesses, developers and policymakers. A collaborative approach is key to creating the high-quality, modern workspaces that will attract and retain tenants and ensure the city’s ongoing success,” Mr Grove said.
The Property Council of Australia Office Market Report is released twice a year and provides a detailed analysis of vacancy rates, supply trends, and market demand across Australia’s major CBD and non-CBD markets. For more information visit: www.propertycouncil.com.au/news-research/research/office-market-report.
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Media: Andrew Parkinson | 0404 615 596 | [email protected]