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Australian office markets in demand as 2020 starts with a bang

Australia’s national office market will start the year on a high on the back of a surge in overall demand for office space in the final quarter of 2019.

Colliers' latest Office Demand Index recorded a 25% increase in total demand for office space nationally from Q4 2018 to 530,369sqm in Q4 2019.

“For the past three years, Australia’s office markets, particularly Sydney and Melbourne, have experienced strong demand conditions as white collar employment has soared,” Simon Hunt, Colliers Managing Director of Office Leasing, said. “In August 2016, there were circa 70,000 white collar jobs available Australia-wide. As at August 2019, there were around 103,000 white collar jobs available. 

‘Conditions in the office market are at unprecedented levels, and there are multiple outlier trends that we are seeing that have not been witnessed in the past 30 years, including record high pre-commitment levels, changing workplace trends and the rise of the freelancers and flexspace.”

The Q4 2019 Office Demand Index found that while all sectors of the office market saw an increase in demand nationally at the end of 2019, smaller office space continued to be the “sweet spot”. 

Colliers recorded a 12% increase in enquiries for space under 1,000sqm and a 22% increase for space between 1,000-2,999sqm (by area) when comparing 2018 to 2019 data.

“In the Sydney CBD, we saw an additional 50,000sqm of enquiry for space between 1,000- 2,999sqm in 2019 compared to 2018; and in Victoria we saw an additional 70,000sqm for this same segment, with the majority of that increase recorded in the metro regions of Melbourne,” Mr Hunt said.

According to the report, many markets recorded similar levels of enquiry in Q4 2019 as the prior year; with the exception of the Melbourne CBD where the low vacancy rate resulted in lower levels of enquiry compared to 2018. 

“Vacancy within the Melbourne CBD is forecast to reach sub-3% levels, so we’re seeing a lot more renewal activity on the basis there are no new opportunities for tenants to seek out,” Mr Hunt said. 

“There are limited opportunities for contiguous space in existing buildings including new developments that will come online this year, which are also almost 100% committed prior to completion. We won’t see much backfill supply come through until 2021 at the earliest.

Brisbane enquiry was also slightly down on the prior year; due to a higher than average level of enquire in 2018 due to the resumption of the Brisbane Transit Centre and the emergence of co-working in this market.”

In Adelaide, Colliers recorded a 78% increase in enquiry for small suites (office space below 1,000sqm), while in Canberra there was a 74% increase in demand for space over 3,000sqm from the previous quarter (Q3 2019). Perth saw a 21% increase in overall enquiry from Q4 2018 to Q4 2019. 

The IT and Business Services sectors recorded the greatest number of enquiries in 2019, with an average enquiry size between 500-700sqm; whilst the Government sector enquired for the most space.

“Last year saw a rise in enquiries from Government, with a number of major requirements coming to market and strong demand in the sub-10,000sqm bracket,” Nick Evans, Colliers Head of Government Property Services and Strategic Accounts, said. “This enquiry was driven by lease expiries, the establishment of the new Property Service Provider (PSP) arrangements and ongoing improvements to the way Government property is managed.

“Ongoing Commonwealth Machinery of Government (MoG) changes and expected Government programs will increase enquiry and requirements in 2020 and 2021, predominately in Canberra and other major markets such as Sydney, Melbourne and Brisbane.”

Colliers transacted a total of 953 leasing deals for more than 685,000sqm of office space nationally in 2019. The Information Technology sector was responsible for the greatest area transacted, the majority of which was in the Sydney CBD.

“We also saw almost 50,000sqm of office space transacted for the flex-space sector with approximately 18,000sqm in the Melbourne CBD, and just over 10,000sqm in Brisbane CBD,” Justin Lam, Colliers Associate Director of Tenant Advisory, said. 

“Although demand remains buoyant from flexible workspace operators, deal flow and new acquisitions have certainly slowed, following a unsuccessful IPO attempt by WeWork in 2019.

“This spotlight on the sector has driven landlords to place more scrutiny on their due diligence process when evaluating suitable operators. As the sector continues to mature, and flexible work space offerings become a minimum expectation for an office building, we expect the more established brands to continue expanding across the board.”

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Simon Hunt

Managing Director | Office Leasing


As the Managing Director of the Office Leasing Division my team includes over 100 staff and more than 75 leasing operatives across every State and Territory. I have been with Colliers International for 25 years, joining the Office Leasing team in 1993 and worked my way up to Managing Director in 2005.  Along with managing the Office Leasing National Team I hold a number of senior positions within Colliers including a member of the ANZ Executive, Executive Leadership Team and Senior Leadership Team.  I am a Licenced Estate Agent and a member of the Real Estate Institute of Victoria, Property council of Australia and RICS - Royal Institute of Chartered Surveyor.

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Nick Evans

Head of Government Property Services & Strategic Accounts | Occupier Services


Nick’s experience extends across a range of policy, corporate and operational roles throughout his 17 year career working for the Australian Government, and has provided him with an excellent understanding of Government activities and directions.

As National Director of Government Property Services, Nick is responsible for the implementation and co-ordination of our Commonwealth Government Business Plan to increase opportunities and revenue across the national business for Colliers International and its clients.

  • Property strategy: developed through management of large Commonwealth property projects; business process improvement;
  • Stakeholder engagement: developed and enhanced through roles managing large Government Programs and Corporate Projects;
  • Strategic planning: developed through major change events and ongoing process innovation and enhancement.
  • Human resources and financial management: developed through corporate services and service delivery network roles;
  • Service delivery, policy and program management: developed through extensive corporate experience; and
  • Internal governance arrangements.
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Justin Lam

Director, Tenant Advisory | Occupier Services


Justin is a  corporate real estate professional, with exposure in Australian and Hong Kong real estate markets, specialising in occupier advisory, transaction management and tenant representation.

Justin has represented occupiers for lease renewals, relocations, disposals, consolidations, negotiations, make good and surrender advice.  He has also advised clients on their corporate real estate strategies and is an Associate member of the Australian Property Institute (AAPI).

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