Where Are We At: Sydney CBD Office Market
In the usual flurry of activity trying to get things done by the end of the year, it is always good to pause for a moment, and check where the market is at.
Office occupancy rates have been increasing as more people have returned to the office but those rates are now stabilising. That means working from anywhere is here to stay.
Utilisation rates have been slowly decreasing for decades so it is no surprise that they continue to do so, albeit slowly as is the nature of leasing office space. It is a continuous office usage improvement process undertaken by every corporate. The effect of this is that over time corporates are taking less space per person.
Each corporate has its own unique occupancy and utilisation rates.
The effect of this continuous office usage improvement process is that positive net absorption (the real take up of space) has been in slow decline since the 1990’s. The market is not absorbing the office space the way it used to.
Vacancy now stands somewhere between 11.5% and 14% depending on how people are counting it. The difference in the figures is the amount of unoccupied space that is or is not being counted. Our own research says there is more space on the market now than in the first half of the year. It also says that more unoccupied space is coming online in 2024 because of the continuous office usage improvement process.
The statistics highlight that 2024 should be a very interesting year for the Sydney CBD office market.