Melbourne CBD Office Market Q3 2023

Key Points:

• Leasing demand in the Melbourne CBD saw growth in Q3 23, with a slight increase in enquiry volumes to 82,000sqm and a moderate increase in number of enquiries to 63 from 60,780sqm and 52, respectively.
• H1 2023 saw the completion of 555 Collins street, bringing to market 47,800sqm of prime office space. Expected total 2023 supply of 95,000sqm, inclusive of the 555 Collins street development, remains significantly below the historical average of 180,000. 
• Melbourne CBD’s overall vacancy rate ended H1 23 at 15.0%. This figure represented an increase of 90bps from H2 22.
• CBD prime net face rents ended Q3 23 at $699, representing a 0.8% increase q-o-q and 1.5% y-o-y.
• Melbourne CBD office sales saw a slight increase in Q3 23 with $70m in deals completed in Q3 2023, and cap rate expansion continued with a 22bps increase recorded this quarter to 5.56%.