Headline vacancy rate decreases in the Adelaide CBD

• Net absorption totalled 13,300 sqm in Q4 2025, up significantly from the previous quarter’s reading of 3,500 sqm. On a rolling annual basis, net absorption in the Adelaide CBD reached 27,900 sqm.
• The headline vacancy rate decreased 0.8 percentage points (pps) to 14.9% over the quarter. The prime grade vacancy rate also decreased 1.4 pps to 13.4%, driven by expansionary activity by large tenants (>1,000 sqm).

A relatively soft supply pipeline

• No major developments completed over the quarter. However, there is currently one project under construction in the supply pipeline, totalling 21,700 sqm, and two projects with plans approved, totalling 84,000 sqm.
• The project under construction is Market Square – a 21,700 sqm office tower developed as part of a broader mixed-use residential and retail development by ICD Property on Grote Street. The building is 58.5% pre-committed and expected to complete in Q3 2026.

Yields were unchanged on a quarterly and annual basis

• Average prime net face rents increased 0.1% over the quarter to AUD 497 per sqm p.a. and reflected year-on-year growth of 0.7%. Average prime net effective rents were stable at AUD 189 per sqm p.a., with year-on-year growth declining 2.8%.
• Average prime midpoint yields were unchanged at 7.75% over the quarter. There remains a spread between buyer and vendor expectations, but this gap has narrowed over the past 12 months. Average prime midpoint yields were also stable on an annual basis.

Outlook: Occupier demand expected to remain positive over the near term

• Demand levels in the near term are expected to remain positive, supported by some large businesses expanding and centralising to the Adelaide CBD. However, net absorption is likely to be below the robust levels of the last three years.
• Investors are likely to remain selective in terms of potential acquisitions amidst ongoing broader global economic uncertainty. Prime office yields have reached the end of the softening cycle and are forecast to stabilise over the short term.