Amid rising demand for premium, pre-fitted office space, office sublease availability across the country fell by 7.3 per cent to a more than two-year low of 246,027sqm.
According to CBRE’s most recent Sublease Barometer, Melbourne saw the highest quarter-on-quarter (q-o-q) decline in sublease availability in Q3 at 21.3 per cent, or about 29,500 square metres of space. Perth saw the second-largest decline at 19.9 per cent, or over 1,400 square metres of space.
A total of 56,300 square metres of new market additions were offset by 75,600 square metres of sublease space that was either leased or withdrawn nationwide.
CBRE’s Pacific Head of Office Leasing Mark Curtain said strong appetite for high-quality fitted office accommodation has been a key theme for Australia’s office market over the last two years.
“This trend has aided the recovery of the sublease market, with availability having fallen to the lowest level in over two years after hitting a pandemic peak of 428,600sqm in January 2021,” he said.
“We are anticipating strong transactional activity to drive further stock reductions in Q4.”
After being on a decreasing track for five consecutive quarters, Brisbane saw the biggest q-o-q rise in sublease availability, totalling 7,400 square metres.
Sydney maintained relative stability with a net gain of less than 100 square metres over the same time, while Adelaide likewise saw a net increase of 4,200 square metres throughout the quarter.
Less than 10 per cent of Australia’s total sublease availability as of Q3 2022 was in unfitted space, with more than 90 per cent of that being in prime-grade buildings.
“While sublease availability is expected to remain fluid as corporates continue to assess their corporate real estate strategies, the ongoing flight-to-quality by tenants and increasing demand for A-grade, pre-fitted space is anticipated to offset potential new additions in the near term,” CBRE’s Head of Forecasting and Data Analytics Joyce Tiong said.
Office Occupancy
October saw office occupancy rates climb in the majority of major Australian capitals.
Occupancy in Perth is a nation-leading 78 per cent, while Sydney (58 per cent), Canberra (57 per cent) and Melbourne (45 per cent) similarly saw an increase in occupancy levels.
Adelaide and Brisbane rates dipped slightly to 76 per cent and 64 per cent, respectively.
Peak occupancy days remain elevated across the nation, with Perth once again leading the pack at 83 per cent, followed by Adeliade (82 per cent), Brisbane (74 per cent), Sydney (70 per cent), Canberra (69 per cent) and Melbourne (60 per cent).
