Skip to main content Skip to footer

Colliers Australian Office Market Outlook

1536 x 1040 ResearchNews Hero Image SiteCore 1

Colliers Office Leasing experts share forecasts for key CBD markets

Colliers is pleased to present its outlook for Australia’s key CBD office markets for the year ahead, to complement the launch of the Property Council of Australia’s Office Market Report for the first half of 2022.

Find below commentary on each major market from our Office Leasing experts:


By Cameron Williams, National Director, Office Leasing (0412 691 765)

“Overall, the Sydney CBD office market has shown strong resilience despite the pandemic. The vacancy rate may increase slightly in the second half of the year, due to the completion of Quay Quarter Tower and Salesforce Tower, however this will be due to the way in which the vacancy is accounted for with both developments having significant commitment to date and a lot of continued interest that will complete over the next six months.

“The prime market in Sydney, particularly in the core of the CBD, is highly sought as a flight-to-quality trend continues to play out. The Sydney CBD premium market is dominated by interest from private equity groups, legal and professional services.

“Tenants are looking to trade up in terms of both building quality and location. They want to attract talent back into the office and premises that are inspiring with great amenity are in hot demand.

“The recently released NSW State Government Tech Central Scale-Up Accommodation Rebate is expected to stimulate an already strong market in the Southern CBD / Surry Hills / Ultimo precinct as tech companies take advantage of the rebates available.”


By Andrew Beasley, National Director, Office Leasing (0412 066 288)

“We expect that the current PCA vacancy result (11.9%) is the peak of the current cycle before a steady decline in vacancy is expected over 2022, albeit dependent on more normalised and stable market conditions for the balance of the year and into 2023. We saw some solid leasing activity within the last three months of 2021 and expect that demand will return after most Melbournians have returned to work after having most of January off. The strong leasing activity in the Sydney CBD in the last three months of 2021 is also a good indication that the Melbourne CBD should see some solid activity this year and start to put downward pressure on vacancy and a reduction in incentives.

“Obviously, COVID is still causing uncertainty. It appears that sublease vacancy has peaked and we haven’t seen any large tranches of sublease space enter the market. That said, there has been some good activity in the sublease market and we expect that some of this will also be withdrawn over the coming months as people start to return to the office in greater numbers. Whilst we have a large overall vacancy rate in the Melbourne CBD, we only have two new developments in the pipeline – being 555 Collins Street (2023 completion) and MQT (2024 completion) – if activity returns to normalised levels we may in fact have an undersupply as the majority of major developments will not be delivered until 2026, assuming they obtain pre-commitment this year.

“We are seeing most major organisations reducing their overall footprint, in particular the major banks have been disposing of space at a rapid rate, particularly those headquartered in Melbourne. We believe it is a little too early to say that there is a definitive trend on how people will occupy space moving forward. I think we all agree that most companies will adopt some form of flexible work, however what this means for overall demand is yet to play out. The main reason for this in Melbourne is that we really haven’t had the opportunity to return to the office properly in the past two years due to ongoing restrictions and mask requirements, which is a significant detractor for some people returning to offices. We hope to move through the current phase and avoid further lockdowns, and once the indoor mask mandate is removed we believe that we will see solid return to the office. If we look at the development market, projects will need to be focussed on greater service and amenity offering to ensure they are creating dynamic workplaces that make people want to return to the office.

“We hope Melbournians can see that the reason we have been voted the most liveable city on multiple occasions is because of our wonderful CBD and the culture it provides through cafes, restaurants and the arts. If we don’t return to the office and support these businesses, we are threatening the very ethos that makes Melbourne great.”


By Matt Kearney, National Director, Office Leasing (0411 209 523)

“Whilst the current total market vacancy rate in the Brisbane CBD sits at 15.4% and is likely to peak just shy of 16%, the demand outlook for new developments and prime grade assets is strengthening with most occupiers now seeking next-generation workplaces. 

“This has been evident in recent months with commitments in the CBD from the private sector, namely Great Southern Bank (at 300 George Street and KPMG and APA Group at 80 Ann Street) which will fall into the PCA vacancy data over 2022 and 2023 aligned with their lease start dates.  This activity has no doubt created positive momentum with current market requirements including BDO, Hopgood Ganim and Brisbane City Council.  We are also expecting further requirements to come online in 2022 from the major banking, energy and professional services sectors.  Whilst securing the next-generation workplace is a major driver, it has to be said that value for money and flexibility are also critically important factors that occupiers will take into consideration when making decisions about its real estate.  

“We have no doubt that the CBD is on the road to returning to its former glory. Brisbane is now in the enviable position of entering a ‘golden decade’ as the 2032 Olympic City which will further endorse the appeal of Brisbane as an idyllic destination to live, work and play and will see significant economic benefits. Brisbane has an unbelievable opportunity to become a true gateway city to Australia. Major infrastructure projects in our region are well underway and future projects will be accelerated in preparation for the Games. These fundamentals can only lead to strong economic growth and increased white collar employment which will be very beneficial for our office markets, particularly the Brisbane CBD.”


By Jemma Hutchinson, National Director, Office Leasing (0422 870 473)

“Overall vacancy in the Perth CBD has declined further over the second half of 2021 to 15% from 16.9%. The Perth CBD vacancy rate is a continuation of a longer-term downward trend and the lowest we have seen since the reported figure in Jan-2015 of 14.7%. The tighter vacancy rate highlights ‘flight-to-quality’ movement that has emerged in Perth in recent years, as major corporate tenants seek to provide staff with high quality working environments in a tightening employment market.

“Whilst Perth has had the highest CBD vacancy rate in the country in recent years, it is important to remember it is a smaller and more volatile market – and also has the highest proportion of C and D grade stock in the country. For these reasons, Perth is always likely to be artificially higher than more mature markets like Sydney and Melbourne. Declining vacancy rates are an encouraging sign for the Perth office market and the local businesses that rely on office workers to thrive. It demonstrates confidence, not only in the office market but the WA economy more broadly.  It has undoubtedly been a testing time for office markets nationally, but in Perth, there is definitely light at the end of the tunnel.

“We believe the Perth property market overall is poised to move with this change. Office rents and incentives have generally stabilised across 2021. However, despite the improved levels of activity, face and net effective rental growth still remain stagnant. It is time to shift the market and move with the demand. We have seen increased rents across several Perth CBD assets over the last six months and until we see incentives start to decline, which needs to be driven by the market, we will see Perth property owners increase face rents as vacancy tightens and demand remains strong.

“We are seeing new supply enter the market in the next few years, however a lot of this new supply is leasing ahead of practical completion and will have minimal impact on the overall vacancy long term. We know that several larger lease commitments (>4,000sqm) will be announced in the CBD over the coming months.

“For years, Perth vacancy rates have been stubbornly high as tenants have moved to new buildings as they come online, leaving older buildings with vacancies. However, in recent times, Perth landlords have been proactive and a significant amount of secondary grade stock has now been refurbished and has a lot to offer tenants and can contribute to an increase in activity. The most recent results from the PCA now show demand is starting to exceed supply and tenants are looking to existing office buildings for space.”


By James Young, National Director, Office Leasing (0411 130 775)

“Enquiry levels in the sub-500sqm range in early 2022 have been positive and, as this brokerage enquiry is a proven leading indicator of economic activity, we expect that this will have a role in driving positive demand for the Adelaide CBD over the next 12 months, despite an increase in vacancy expected in 2022 off the back of uncommited vacanct space due to come online with the completion of 83 Pirie Street in 2022. In addition, the larger enquiry that was generated in 2021 remains on track at this time.

“It is important to note the vacancy rates within sub-sectors of the market vary significantly. Modern office buildings, and those with a modern refurbishment at least, continue to experience much lower vacancy as opposed to buildings with a more passive approach to presentation and competitiveness

“What we are not expecting to see in 2022 is the onset of additional sub-lease vacancy. Those corporations who have embarked on sub-leasing activity to date are now at a point of holding off additional sub-leasing activity as their own work-from-home and work-from-office strategies are clarified over the first half of 2022. Most would say currently that, should all their employees return to the office, they would not be able to seat them and this presents a risk.

“The flight-to-quality trend continues, if not accelerating as the quality of premises has an increasing important role to play in employee engagement. The impacts of tenant commitment activity in 2022 for those projects completing in 2023 won’t be felt this year, rather impacting vacancy in 2023 and 2024. 60 King William Street, 83 Pirie Street and Festival Plaza will all be vying for tenants throughout 2022, each playing to their respective strengths.

“There is a broad cross section of tenant enquiry in the market at present, from professional services and energy companies to state and federal governments. The majority is driven by lease expiry dates. Specific projects such as the Entrepreneur and Innovation Centre at Lot Fourteen will, however, generate tenant commitment which is largely ‘net new’ to the Adelaide CBD market and not influenced by lease expiry.  The largest current active enquiry is SA Pathology at 15,000sqm-plus for 30 years, which whilst not a traditional commercial office requirement is expected to be the next big commitment announced in the first half of 2022.  The motivation for the requirement is strategic in locating close to the Royal Adelaide Hospital.

“At this early stage, the outlook for the Adelaide office leasing market in 2022 is very positive.”


By Aaron Bruce, Director, Office Leasing (0477 600 989)

“For the balance of calendar year 2022, we expect the vacancy rate in the ACT will continue to contract and should reach close to 5% total market vacancy. This is likely to be driven via a combination of factors, but predominantly through a few major supply side withdrawals for repurposing to alternative uses or development, many of which that are well underway. In effective terms, this has already been catered for in leasing markets as the spaces are not being made available to tenants for lease however we haven’t seen the underlying impact on the actual vacancy rates just yet.

“With the Commonwealth Government’s continued COVID-19 recovery efforts evolving out of Canberra, we expect to continue to see a strong demand for shorter term ‘surge’ accommodation by various Commonwealth user groups, which will also absorb some of the few remaining vacancies around the market in the short term.

“The other major event that Canberra is due to weather this year is the impending Federal Election. With the statutory deadline for the election needing to be held by the 21 May 2022, Canberra will therefore undergo a period of time referred to as a ‘caretaker period’. During this time, major procedural, contractual and decision making events will be put on the backburner.

“While the outlook for much of 2022 is for a largely contracting vacancy rate, the forecast for early 2023 and beyond is not necessarily a continued long term trend. With a couple of major backfill vacancies coming back into the market in late 2022 and early 2023 in the Canberra CBD – and with the completion of some new A grade stock including at Canberra Airport Business Parks – we could see the vacancy rate trend upwards again from early 2023 and beyond. With a number of other major Canberra CBD market accommodation processes, including ATO, DESE and Infrastructure, still to have results known, there is also a potential combination for further new stock and older backfill accommodation to continue to come back into the market as we look at the longer term outlook towards 2025-2026.”

Related Experts

Cameron Williams

Director In Charge | Sydney CBD


Cameron is an office leasing specialist who has focused on the pre-commitment market over the past 15 years within the Sydney CBD. Cameron has over 25 years of office leasing experience all with Colliers. He has been appointed to some of Sydney's most significant recent developments including Westfield Sydney City on behalf of Scentre Group, 5 Martin Place on behalf of Dexus and Cbus Property, 121 Castlereagh St (the re-development of the David Jones mens store) on behalf of Cbus Property and AMP Capital's flagship project, Quay Quarter Tower.  

Cameron is the head of the NSW Office Leasing team in addition to being the Director in Charge of the Sydney CBD. Cameron is a member of the National Executive Leadership and Senior Leadership team.


View expert

Andrew Beasley

National Director | Office Leasing


Andrew has  been an integral part of the Colliers International Office Leasing team for over 20 years and has worked with some of the nation’s biggest corporate, institutional and private clients.

He is considered a major transaction and pre-commitment specialist in Melbourne having been involved in an array of large scale building refurbishments and developments.

Part of Andrew's role also includes leading the successful Melbourne Office Leasing business.

Colliers International Australian Employee of the Year 2018.

View expert

Matt Kearney

National Director | Office Leasing


I have 23 years experience as a leasing agent in the Brisbane office market and have been with Colliers International since 2003. In my role as National Director for Office Leasing, I am a member of the Office Leasing National Executive and am also responsible for Colliers International’s Queensland Office Leasing Business.  My other duties and activities include client and customer engagement, brokerage, marketing and negotiating leases in major office projects.

View expert

Jemma Hutchinson

National Director | Office Leasing


Jemma joined Colliers in 2022 with over 10 years of commercial leasing experience. Jemma relocated to Perth in 2017 from Melbourne, where she was recruited to build and create an internal leasing business at Primewest and bring Office Leasing in house, after building a strong reputation in office leasing.  

In 2019, Jemma was promoted to National Leasing Manager, following her transacting over 60,000sqm nationally of office leasing deals on behalf of Primewest and their institutional, corporate and private clients.

Jemma strives to exceed all client expectations and ensures she is always providing the highest level of client and customer service. She has a detailed knowledge of the leasing market which has resulted in many successful outcomes for her clients.

Jemma has been involved in successful leasing campaigns at One William Street and Exchange Tower on behalf of GIC (40,000sqm) and now 140 St Georges Terrace (29,000sqm) on behalf of Primewest/Blackrock.

Jemma is a major transaction and pre-commitment specialist in Perth having been involved in an array of large-scale building refurbishments and developments. Jemma concluded a deal with the Federal Government Services Australia to build their new office HQ of 4,500sqm down in Bunbury.

Jemma has led major appointments across the Perth CBD and WA including, Exchange Tower, One William, 140 St Georges Tce, Australia Place and 111 St Georges Tce along with three pre-commitment development opportunities.

Jemma was awarded the PCA WA Office Agent of the year in 2019.

View expert

James Young

State Chief Executive | South Australia


Specialising in office leasing precommitment, James has been actively involved in significant Adelaide CBD projects that have changed the city's skyline.  Current projects include the Entrepreneur and Innovation Centre, Lot Fourteen on behalf of the Government of South Australia (Renewal SA) and Festival Tower with Walker Corporation. 

In his role as State Chief Executive, James facilitates many opportunities throughout the local business on behalf of clients and customers of Colliers.  Accordingly, his knowledge of South Australian property activity across all sectors is extensive.

James is an active leader demonstrated by high volume of  referral activity, is an enthusiastic collaborator and leads the local Office Asset Class team.

View expert