Adelaide CBD Office Market Q3 2023

October 12, 2023 7 Minute Read

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Key Points:


  • 120,300 sqm of new office supply is currently under construction in Adelaide. Projects currently under construction are well-leased as of Q3 2023 with the bulk of demand coming from existing Adelaide tenants looking to relocate within the market.
  • The Adelaide CBD overall vacancy rate ended July 2023 at 17.0% as per the most recent PCA data. CBRE Research suggests the vacancy rate within newer prime Gen3 assets sat at 7.1% as of Q3 2023, much lower than the overall figure.
  • Prime gross rental rates ended Q3 2023 at 585 AUD/sqm. This represented a quarter-over-quarter increase of 0.3%.  Prime incentives remained unchanged at 35.2% as of this quarter. Despite rising gross rents, net effective rental rates declined over Q3 2023 due to rising outgoings.
  • Office sales volume totalled AUD 13 million in Q3 2023. Investment markets have remained on pause due to recent interest rate hikes and market uncertainty.
  • Average prime office yields softened to 7.1%, while secondary yields softened to 8.9%. These values represented quarter-over-quarter increases of 23 bps and 12 bps, respectively.