Is Australia’s corporate right sizing cycle at an end? New CBRE data highlights significant fall in national sublease office availability.

The supply of office sublease space across Australia is close to a pre-pandemic low as corporate occupiers shed less space, new CBRE research shows.

Sydney and Melbourne have led the way according to CBRE’s data, which highlights that just 245,000sqm of sublease space was available nationally as of June 30, 2024, following a 6.6% decline in Q2.

CBRE Associate Director of Research Thomas Biglands noted, “Sublease volumes declined by 38.3% in Sydney and 11.8% in Melbourne in the first half of the year, as the number of large sublease listings by corporate occupiers continued to shrink. The slowdown in large listings is encouraging for the market as it signals that larger occupiers are nearing the end of their right-sizing cycles.”

Just 49 sublease listings of more than 1,000 sqm were available nationally at the end of Q2, down from 65 in Q4 2023.

Outside of Sydney and Melbourne, CBRE’s report shows that sublease volumes remained relatively stable over Q2 2024.

There was a slight decrease in Perth and marginal increases in Brisbane and Adelaide. However, CBRE’s Pacific Head of Office Investor Leasing Tim Courtnall said these smaller markets remained very tight, with sublease vacancies below 1.0%.

“It’s encouraging to see a number of sublease withdrawals across all key markets as disposal transactions complete and occupiers gain more conviction about their workplace practices,” Mr Courtnall said.

“The Finance & Insurance and Technology, Media & Telecommunications sectors were the largest contributors to sublease availabilities in Q2 2024, followed by Professional Services. However, volumes in all three of these sectors declined during the quarter, with the largest decline seen in the Professional Services sector.”