Sydney CBD’s commercial leasing market continues its recovery, with rising tenant demand for high-quality fitted out offices in core locations amid reduced availability of Premium space, according to leading real estate agency Savills Australia’s recently released ‘Full Floors Report.’
A range of factors are contributing to the increased appetite for Premium office space according to Savills - including the ‘flight to quality,’ sustained tight labour market and the ‘Metro Effect,’ with enhanced connectivity unlocked by improved public transport infrastructure with the recently expanded Sydney Metro.
Interestingly, Savills says CBD core availability is declining in response to tenants’ ‘flight to location,’ while availability is on the rise in Midtown and the Western Corridor. However, Savills cautions that contiguous floor options remain limited across the board – particularly for large space requirements over 10,000 square metres that are available now and over the next 24 months. There is however, a substantial increase in 10,000 square metre options becoming available early 2027 and into 2028.
Savills’ Full Floors Report is based on an exclusive dataset that monitors over 3.9 million square metres of Prime Grade office space in Sydney CBD. The agency has tracked this data for some 20 years, revealing current and future leasing availability across Premium and A Grade buildings on a floor-by-floor basis.
“The availability of Premium grade contiguous floor space in Sydney’s CBD reflects the trend for tenants to upgrade workspace in a bid for talent and to enhance their ESG credentials,” said Chris Naughtin, National Director Capital Markets Research at Savills Australia and New Zealand.