Sydney office vacancy rates go down
The Sydney CBD office vacancy rate has dropped slightly to 11.5%. Parramatta and North Sydney also dropped, 3 and 1 percentage points respectively.
Around 190,000 SQM of space will come on the market by the end of 2024, with limited new stock in 2025 and 2026.
Flight to quality still going strong
The flight to quality trend continues, with tenants taking advantage of high incentives to relocate to quality office space on favourable terms. Grade A and trophy office buildings are experiencing high demand, because well-funded companies wanting to increase office attendance are competing with their space.
Fit-out PLUS full market incentive?
The cost of new fit-outs is at an all-time high. Some landlords are retaining existing, high quality fit-outs and offering them to incoming tenants with a full market incentive as well. Often the make good can be waived too. This means tenants can save on the way in and on the way out! Talk to one of our transaction managers for details.
Return to office vs. hybrid working
The debate between returning to the office and maintaining hybrid work continues. While some businesses are pushing for a full return to strengthen team dynamics and collaboration, hybrid working remains popular due to its flexibility and work-life balance. Companies are navigating these preferences, striving to find the right mix that maximises productivity and employee satisfaction.
Tenants can take advantage of negotiation leverage
The current office space market favours tenants over landlords. With high vacancy rates, landlords are offering generous incentives and favourable lease terms to secure good tenants. With numerous choices available, tenants need to carefully evaluate their options to strike the best deal.
Therefore, it’s crucial to partner with an independent tenant representative who can provide unbiased, expert advice and generate maximum negotiation leverage.
Vacancy rates
Sydney CBD – 11.5%
North Sydney – 23.0%
Macquarie Park – 19.0%
Chatswood – 21.0%
Crows Nest/St Leonards – 27.0%
Parramatta – 19.0%
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.
