Melbourne CBD Office Figures Q4 2024

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).
• Supply completions over 2024 reached 79,000sqm, significantly below the 5-year historical average of c.180,000sqm. Melbourne’s supply pipeline continues to evolve, with multiple projects getting delayed. Average annual forecast supply from 2025-2029 is estimated at c.68,000sqm.
• 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 held mostly flat over Q4 2024. Prime effective rents saw slight negative movement quarter-on-quarter (-0.5%), however remain positive year-on-year at +1.8%.
• Prime CBD Office Yields increased by 10bps quarter-on-quarter in Q4 2024.