Melbourne CBD Office Figures Q1 2025

Key Points:

• Leasing demand in Melbourne’s CBD measured through net absorption remains negative, with 6-month net absorption of -44,962sqm recorded. Close to 100% of this is attributable to Australia Post’s movement from the CBD into the City Fringe (Richmond).
• Melbourne recorded no major office completions in Q1 2025. Forecast annual supply completions over the next 5-years are expected to be 66% below the 5-year historical average, amidst feasibility pressures putting downward pressure on Melbourne’s supply pipeline.
• Melbourne CBD’s overall vacancy rate ended H2 2024 at 17.96% representing a -6bps decline in the vacancy rate from H1 2024. Vacancy continues to bifurcate across precincts as tenant preference becomes more pronounced.
• Prime net face rents grew by 1.2% over Q1 2025. Prime effective rents saw held flat quarter-on-quarter and grew year-on-year at a rate of +0.6.
• Prime CBD Office Yields increased by 18bps quarter-on-quarter in Q1 2025.