Commercial, News

Snapshot: Sydney's CBD office market

Talk about Sydney's offices tends to swing between worry and relief. The latest Property Council figures sit somewhere in between, and it helps to look at what they say.

The Property Council's most recent office market report, published in August 2026, puts Sydney CBD vacancy at 13.3 per cent. The long-run average is 9.1 per cent, so there is a good deal of empty floor space, and tenants have plenty of buildings to choose from.Look at the premium end, though, and the picture is brighter. Premium-grade vacancy fell from 8.9 per cent to 7.7 per cent, with about 19,400 square metres of new demand. Katie Stevenson, executive director of Property Council NSW, called the premium end "the strongest signal" in the market, and she added that tenants are being selective but are still making decisions.

"Buildings on the same street can look quite different from one another."

CBRE's figures for the same period point the same way. It grades buildings as prime rather than premium, which is a slightly different measure, and its prime vacancy fell to 12.6 per cent, down a little over half a percentage point across the half. Tenants were busy too, with 124 leasing enquiries covering 134,365 square metres in the June quarter, up 7.3 per cent on the March quarter.

Rents are worth a look as well. CBRE found that prime net effective rents, meaning rents once incentives are taken into account, rose over the year in each of the four parts of the CBD it reports on, from 10.3 per cent in the Core to 16.7 per cent in the Western Corridor, and it notes that incentives have tightened. So the market has two sides: plenty of empty floor space overall, and a firmer footing for well-located, well-kept buildings.

No new space reached the CBD during those six months. About 179,675 square metres is expected over the next 18 months, though, and a further 327,844 square metres is being talked about. That's a lot of new choice for a tenant who is thinking about a move, and it's worth keeping in mind whether you own an older building or lease one.

There is still room to ask what a landlord can offer, whether that's the length of the lease, the fit-out or the rent review.

If you're an owner, a tenant weighing up your building is comparing it with newer ones, so the lobby, the services, the lease terms and the way the building is looked after all count. The rent growth is encouraging, though it is strongest in the prime buildings, and an older building may see a different result. A fresh look at its condition and its leases can show where it stands.

If you're a tenant, there is still room to ask what a landlord can offer, whether that's the length of the lease, the fit-out or the rent review. Because incentives are tightening in the best buildings, it helps to start the conversation early, and to ask your solicitor to read the lease before you sign. There's no need to rush, but it helps to know where the market sits before you start.

These figures are a snapshot, and they'll change when the next report comes out. Buildings on the same street can look quite different from one another. If you'd like to know how your building or your lease sits against the market, our Haymarket team on George Street would be glad to talk it through.

Not sure how your building compares? We'd be happy to look at it with you. Talk to the McConnell Bourn Commercial team.

We know Sydney's
commercial market. Long-term value
starts with a clear plan.

Every commercial property has its own condition, tenants and priorities, so we don't use a one-size-fits-all approach. Whether you're weighing up a lease, a sale or an appraisal, we take time to understand what you need before recommending a strategy.

Snapshot: Sydney's CBD office market

We know Sydney's commercial market. Long-term value starts with a clear plan.

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We know Sydney's
commercial market. Long-term value
starts with a clear plan.