Headline vacancy rate decreases in the Adelaide CBD

• Net absorption totalled 4,500 sq.m. in Q1 2026, down from 13,300 sq.m. in the previous quarter.
• On a rolling annual basis, net absorption in the Adelaide CBD reached 24,800 sq.m. Nevertheless, the headline vacancy rate decreased 0.3 percentage points (pps) over the quarter to 14.6%.

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 sq.m., and three projects with plans approved, totalling 101,000 sq.m.
• The project under construction is Market Square – an 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 2.7% over the quarter to AUD 510 per sq.m. p.a. and reflected year-on-year growth of 3.4%. Average prime net effective rents increased 3.3% to AUD 195 per sq.m. p.a., with year-on-year growth of 2.2%.
• Average prime midpoint yields were unchanged at 7.75% on a quarterly and annual basis. There remains a spread between buyer and vendor expectations, but this gap has narrowed over the past 12-months.

Outlook: Prime yields forecast to remain unchanged over the short 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.
• Prime office yields have reached the end of the softening cycle and are forecast to stabilise over the short term. Investors are likely to remain selective in terms of potential acquisitions amidst ongoing broader global economic uncertainty.