Outlook 2023 Australia

MELBOURNE

SUPPLY

DEMAND

RENTS

KEY OUTLOOK

 After 550,000 sqm of new and refurbished stock was added over 2020 and 2021 combined, the outlook for new supply in the CBD is comparatively subdued.  After 2022, new supply is forecast to decline to an

 Employment growth is

 Prime Melbourne CBD office rents returned to growth in 2022. The growth was supported by a rise in face rent on the completion of new developments. Net incentives have also compressed a little from 40.5% to 39.5% over 2022 as the market reopened following the pandemic.

 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 should support ongoing rental growth.

expected to remain positive, however, the rise in flexible working and downside economic risks may limit demand growth.  Positive demand and limited supply should result in the vacancy trending lower over the next few years.

average of 82,250 sqm per year for the next four years.