Asia Pacific Office Outlook 2024

SYDNEY

K E Y M E S S AG E S

SUPPLY

DEMAND

RENTS

KEY OUTLOOK

 Following the completion of more than 140,000 sqm of new and refurbished prime office stock in 2022, only 10,000 sqm supply hit the market in 2023.  The lull in supply is likely to be temporary, however, as 270,000 sqm of supply is scheduled to complete in 2024.  Beyond 2024, only 90,000

 Prime office net absorption has been resilient despite the shocks of COVID-19 and subsequent rise in flexible working.  Prime net absorption rose for the third consecutive year in 2023, driven primarily by demand for centrally located premium and recently-renovated A grade property. supply is expected to hit the market in 2024, a substantial share of this supply is pre-committed, which should limit upward pressure on vacancy.  Although a surge in

 Sydney prime gross effective rent growth registered a second consecutive year of robust growth in 2023, increasing more than 7.5%.  Although the market remains nuanced, quality uplift is expected to push face rents higher in 2024 while a resilient labour market is expected to keep incentives stable.  Prime gross effective rental growth is expected to average around 4% annually in the 2024 to 2027 period.

 A surprisingly resilient labour market has

supported the ongoing recovery in the Sydney CBD office market, and it is well-placed to absorb a surge in supply in 2024. Limited supply post-2024 should result in a gradual decline in incentives and a pick-up in effective rent growth.

sqm of net supply is expected to complete between 2025 and 2027.