The Sydney CBD records 9,300 sqm of positive leasing demand over Q4

• The Sydney CBD recorded approximately 9,300 sqm of positive net absorption over Q4 2024. This result was driven by small tenant (<1,000 sqm) demand as large tenants broadly made contractionary moves over the quarter.
• Six out of the 10 Sydney office markets recorded positive net absorption. The largest positive result in the non-CBD markets was around 8,600 sqm in North Sydney while Macquarie Park recorded the weakest result of -13,000 sqm.

Two new completions increase Sydney CBD stock to 5,353,200 sqm

• Parkline Place, 252 Pitt Street (47,800 sqm) and 333 Kent Street (14,200 sqm) completed in Q4 2024 in the Sydney CBD. There is currently 238,900 sqm under construction across seven projects in the CBD. The largest of these is 55 Pitt Street (63,000 sqm).
• There was one completion in the non-CBD markets which was 25 Bourke Road in Alexandria, Sydney South (16,306 sqm). There is currently 133,100 sqm of stock under construction in the non-CBD markets. The largest is Victoria Cross Tower, 189 Miller Street (57,100 sqm).

Sydney CBD prime yields remain flat over the quarter

• Sydney CBD prime net face rents grew 1.0% over Q4 2024 and have grown 4.0% over the past 12 months. Prime incentives marginally reduced over the quarter.
• Prime midpoint yields were flat in the CBD at 5.63% – 7.00%. Yields in Norwest, Parramatta, St Leonards and Sydney Olympic Park/Rhodes softened the greatest amount (44 bps) while the other non-CBD markets softened to various degrees (13-37 bps).

Outlook: Sydney CBD vacancy rate to stabilise with fewer completions over 2025

• The Sydney CBD vacancy rate is forecast to stabilise over 2025 as major supply completions are limited to 33 Alfred Street (30,700 sqm) and 270 Pitt Street (22,700 sqm).
• The Sydney non-CBD markets are projected to maintain elevated vacancy levels, as tenant interest is concentrated within the Sydney CBD, and some proximate CBD locations such as Surry Hills and North Sydney.