ASIA PACIFIC OUTLOOK 2025

MELBOURNE

KEY MESSAGES

Supply

Demand

Rents

Key Outlook

The post-pandemic recovery has supported a cyclical upswing in tenant demand for Melbourne's CBD office market. Growth is expected to continue, and more limited supply in the near-term should support ongoing rental growth.

Following the delivery of nearly 121,000 sqm of prime office stock in 2022 and 2023, new supply in 2024 decreased to 94,000 sqm.

Despite slowing in 2023, net absorption returned to positive territory by the end of 2024.

Prime Melbourne CBD office rent growth has been slowing over the past two years due to elevated vacancy levels and supply in the market.

With new supply slowing, the market will have more time to absorb existing stock, supporting short-term demand.

Supply is anticipated to remain relatively subdued over the next two years, with

With supply easing and demand holding steady, 2024 marks a turning point as rent growth begins to recover.

104,000 sqm slated for completion in 2025 and 78,500 sqm in 2026.

Prime net absorption is projected to rebound and grow steadily through to 2029.

This recovery is expected to support near-term rental growth, with net effective rents projected to rise by over 5% by 2026 and 15% by 2028.

Beyond 2026, the pipeline is more limited, with a total of 142,000 sqm expected to be delivered between 2027 and 2029.

In this context, vacancy rates are expected to continue declining, stabilising at around 10% by 2029.

Cushman & Wakefield

ASIA PACIFIC OUTLOOK 2025