ASIA PACIFIC OUTLOOK 2025

SYDNEY

KEY MESSAGES

Supply

Demand

Rents

Key Outlook

The resilient labour market has supported the recovery of the Sydney CBD office market, positioning it to absorb the surge in supply in 2024. Limited supply after 2025 is expected to drive a gradual reduction in incentives and an acceleration in effective rent growth.

Following the delivery of over 175,000 sqm of new and refurbished prime office stock in 2022, 2024 saw an additional 177,000 sqm after a quieter 2023. Supply is expected to remain subdued in 2025, with 121,000 sqm anticipated as several major refurbishments near completion.

Prime office net absorption has returned to positive territory in 2024 after a decline in 2023. The

Sydney prime gross effective rent grew modestly in 2024, recording a 3.6% increase.

recovery was driven by an improving economy and a resilient labour market.

Face rent is expected to remain stable in 2025, with minimal fluctuations as incentives stabilise and steady market demand is supported by economic growth and a resilient labour market.

With supply remaining subdued in the coming years, net absorption is expected to grow steadily, reaching 80,000 sqm by 2029.

Beyond 2025, prime gross effective rental growth is projected to stabilise within the 6% to 8% range.

Between 2026 and 2029, net supply is projected to total just 200,000 sqm, averaging 50,000 sqm per year.

This steady demand will help stabilise the vacancy rate at around 16%.

Cushman & Wakefield

ASIA PACIFIC OUTLOOK 2025