Adelaide CBD Office Figures Q1 2024

Key Points: 

• The Adelaide CBD continued to see steady demand for office space over Q1 2024, with leasing enquiries higher than those seen in 2020.
• The Adelaide CBD overall vacancy rate ended 2023 at 19.3% as per the most recent PCA data. The vacancy rate within newer prime Gen3 assets sat at 10.5% this quarter, owing to the recent completions of two CBD office buildings. These buildings comprise nearly half of the vacant space amongst Gen3 assets.
• Prime gross rental rates ended Q1 2024 at 615 AUD/sqm. This represented a quarter-on-quarter increase of 2.5%. Prime incentives decreased slightly by 17 bps to 35.2% as of this quarter.
• Office sales volume totalled AUD 18 million in Q1 2024. Investment activity remains subdued due to the continued mismatch between buyer and vendor pricing expectations.
• Average prime office yields softened to 7.5%, while secondary yields saw a sharper rise to 9.4%. These values represented quarter-on-quarter increases of +7 bps and +24 bps respectively.