Over the quarter, Melbourne recorded an increase of c.11,000sqm of sublease space to c.183,000sqm. However, falling sublease availability across most markets had offset the rise in Melbourne's sublease space, resulting in Australian CBD recorded its second quarterly fall, retreating from its peak of c. 429,000sqm in January 2021 to c.397,000sqm (excluding Canberra) as of June 2021.
Before the lockdown, Sydney had been in the bright spot with sublease availability fall for the second consecutive quarter to c.113,000sqm, closing its gap to June 2020 level of c.104,000sqm. Similarly, Brisbane and Perth also recorded a fall of c.4,500sqm and c.5,700sqm to c.31,500sqm and c. 35,000sqm respectively, whilst Adelaide remains stable at 12,500sqm over the quarter.
The fall in sublease availability is generally through a combination of sublease being taken up and occupiers withdrawing space from the market. The fall is mainly from the c.17,000sqm of space being taken up in the Financial and Insurance Services subleases and c.9,300sqm of space being withdrawn in the Rental, Hiring and Real Estate Services, mainly via the re-classification of co-working space over the quarter.
The number of sublease options at the end of March (220) was down by -32% to 151 sublease options. The decline was driven mainly by take-up in the sub500sqm and sub1,000sqm size brackets. Whilst sublease space is likely to remain significant, particularly in larger markets like Sydney and Melbourne; however, flight to quality and occupiers having better clarity on their space requirement is expected to support further sublease contraction over the near term.