Australian Office Market Q1 2023

Key Points:

• Labour market has weakened slightly, with the unemployment rate up to 3.7% in April 2023
• National rental growth stabilised with CBD effective rents up just 0.2% q-o-q in Q1 2023. However, there has been a large discrepancy between markets.
• Incentives were largely stable across the market, with Melbourne observing further rises.
• Sublease availability rose by approximately 3.0% (+7,000sqm) in Q1 2023 to reach 255,000 sqm. This remains about 40% below the national peak in early 2021.
• The investment market was subdued in Q1 2023, registering just $863 million worth of transactions.
• There are a number of assets in the market at the moment, which may provide further guidance on where new pricing benchmarks are at in the higher interest rate environment.