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Sydney Office Rental Rate and Incentives Snapshot 2Q 2023

July 23, 2023 10 Minute Read

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  • Office rental rate growth accelerated across the Sydney CBD over the first half of 2023. The CBD average Prime net face rental rate ended the quarter at AUD 1,078/sqm, an increase of 6.2% y-o-y. Conversely, incentives have remained elevated and continued to rise in the second quarter.
  • The CBD continues to benefit from a flight-to-quality by occupiers and increasing office re-occupancy rates.
  • Rental rate results in Metro Sydney were more mixed than the CBD. Centrally located Metro submarkets such as North Sydney and City Fringe have continued to post strong rental rate growth, while other submarkets have seen only mild increases or contraction.
  • The Sydney real estate market is also being impacted heavily by rising inflation. Outgoings and gross rental rates, in particular, are expected to face significant upward pressure over the remainder of the year due to elevated operational and construction costs.