We are pleased to launch our latest Office Briefing Spotlight report. In this edition, we provide an overview of recent macro developments, and investment and leasing market trends for the major CBD office markets in Australia.

Key takeaways from the report:

• Globally, major central banks are beginning to ease monetary policy leading to materially lower market interest rates, but the RBA will remain on hold until 2025.
• Investment volume increased by 86% in Q2, boosted by several large deals, but transaction activity over the year to Q2 2024 is still down 50% compared to the previous year.
• Underpinning the pick in investment volume, the adjustment in office capital values to the higher interest rate environment is gaining momentum with office-specialist funds reporting capital growth of -19.5% over the year to Q2 2024, according to MSCI.
• Demand continues to be concentrated in higher quality space, with net absorption across the prime CBD markets increasing by c.72,900 sqm over the six-months to July 2024, while net take-up of secondary space fell by c.41,100 sqm.
• Strong prime market take-up in Brisbane saw the overall CBD vacancy rate fall from 11.7% in January to 9.5%, around the same level as Canberra, while the prime vacancy rate declined to 7.2%, the lowest of the major CBD markets.
• Rental growth remains mixed across the CBD markets, with the Sydney CBD recording strong growth in prime face rents in Q2, while higher incentives in Melbourne led to a decline in net effective rents. Rents remained stable in Brisbane in Q2, although the city recorded the strongest growth in net effective rents over the year. 

Read our August 2024 Spotlight here