The Property Council of Australia (PCA) has released its latest Office Market Report, revealing the highest level of vacancy in seven years for Sydney CBD.
The figures, released on a six-monthly basis, reveal that Sydney CBD total office vacancy has risen three percent since July 2020 from 5.60% to 8.60%, and the overall total vacancy for the North Shore almost doubling from 7.77% to 14.21% in the reporting period. Net absorption in the CBD remained negative for the fourth consecutive reporting period, improving slightly to -54,671sqm, while dropping significantly on the North Shore from under -10,000sqm to -32,079sqm in the six monthly period.
CI Australia’s (CI) Managing Director of North Sydney, Bevan Kenny commented that, “While it was North Sydney that recorded the highest total vacancy in the precinct with 19.55%, this was mostly attributable to the relocation of a few large tenants. While this translates to inflated levels of vacancy at present, it gives landlords the chance to refurbish or reposition their assets with improved quality, amenity and technology to ensure that tenants continue to recognise North Sydney as an ideal destination.”
CI’s Chief Executive Officer Andrew Hunter added, "With key markets of the CBD and North Shore experiencing their highest vacancies in seven years, and negative net absorption remaining high, the latest figures are telling of the profound impacts of COVID-19 on Sydney's property markets.
“While the effects are likely to linger for at least the short to mid-term, we are seeing green shoots in the market across leasing and investment. Particularly in the last three months, we have seen groups on both sides of the ledger forging ahead and revising their real estate strategies with a more flexible and opportunistic approach. This is allowing those groups to realise the benefits of a property strategy in action, take advantage of relevant market conditions such as lease re-negotiations, and bring their staff back to work, while remaining cognisant of business and market uncertainty.”