Australian CBD Leasing Markets: Q4 2025 Office Snapshot

Sydney’s overall vacancy rate sits at 13.8% as at January 2026, the highest level since the early 1990s and a clear sign that new supply is still running ahead of demand. The picture by grade is quite mixed. A Grade vacancy recently climbed to 17.6% (from 15.2%in January), and B Grade has moved up to 14.4% (from 12.9%), showing continued softness in secondary assets. In contrast, Premium vacancy has tightened to 8.9% (from 9.8%), reflecting tenants’ preference toward the top tier buildings despite broader softness.

Vacancy is also unfolding differently across the CBD. In the Core, Premium space is relatively tight at 8.8%, while A-Grade sits at 15.0% and B Grade at 15.8%. Outside the Core, including the Western Corridor, Southern and Midtown precincts – vacancies are generally in the mid-teens, highlighting softer demand and more choice for tenants in these fringe CBD locations.

Around 101,300 sqm of stock came to market in 2025, the bulk of this being refurbished stock (93,964 sqm), including:

- 270 Pitt St (23,000 sqm) refurbishment
- 1 Kent St (5,300 sqm) refurbishment
- 33 Alfred Street (32,000 sqm,~65% pre-committed) refurbishment
- 121 Castlereagh Street (11,500 sqm, ~70% pre-committed) new development
- 1 Shelley Street (29,500 sqm reintroduced after refurbishment) refurbishment

‍The next substantial supply wave is not until 2027, when more than 170,000 sqm is scheduled at 55 Pitt Street (63,000 sqm, ~35% pre-committed), Atlassian HQ (57,000 sqm, 100% pre-committed) andChifley Tower South (53,000 sqm, ~50% pre-committed). Beyond this, the pipeline is expected to slow as higher construction costs and limited pre-leasing make new projects harder to commence.

Sublease availability in the Sydney CBD has continued to stabilise and is now sitting below historical averages. As of Q4 2025, sublease space accounts for 0.6% of total stock, indicating a further tightening from earlier in the year and a reduced pool of short-term options for tenants. Availability is still dominated by financial services, tech, and professional firms. Notable tranches include:

- 20 Windmill St – 7,355 sqm (Dentsu)
- 30 Windmill St – 3,686 sqm (SiteMinder)
- Darling Park Tower 3 – 5,971sqm (NTT Group)
- 255 Elizabeth Street – 5,388sqm (Navitas)
- 400 George St – 3,462 (CFS)

With growing diversity and motivated landlords, sublease space offers tenants a chance to secure prime locations at competitive rates.

Sublease availability in the Sydney CBD has continued to stabilise and is now sitting below historical averages. As of Q4 2025, sublease space accounts for 0.6% of total stock, indicating a further tightening from earlier in the year and a reduced pool of short-term options for tenants. Availability is still dominated by financial services, tech, and professional firms. Notable tranches include:

- 20 Windmill St – 7,355 sqm (Dentsu)
- 30 Windmill St – 3,686 sqm (SiteMinder)
- Darling Park Tower 3 – 5,971sqm (NTT Group)
- 255 Elizabeth Street – 5,388sqm (Navitas)
- 400 George St – 3,462 (CFS)

With growing diversity and motivated landlords, sublease space offers tenants a chance to secure prime locations at competitive rates.

Some of the recent notable commitments shaping the Sydney CBD market include:
- HWL Ebsworth – 5 Martin Pl (11,023 sqm)
- NSW Government – 252 Pitt St (4,400 sqm)
- CreativeCubes.Co – 347 Kent St (2,718 sqm)
- Snowy Hydro – 225 George St (1,856 sqm)

Growth Concentrating in Tech CentralAustralia’s tech sector continues to scale, with around 40,000 tech companies, more than 1 million jobs and tech spending projected to grow 8.7% YoY, outpacing the broader APAC region. Within Sydney, this growth is increasingly concentrating in Tech Central, anchored by Atlassian.Central, Central Place and the Post House, which together will deliver over 200,000 sqm of new-generation office space targeted at technology and innovation tenants. Atlassian Central alone is a 39-storey, 59,100 sqm Premium tower designed as one of the world’s tallest hybrid-timber office buildings, with an electricity-generating façade, and a fully electric, targeting market-leading Green Star and NABERS Energy ratings. When complete, Atlassian is expected to offer around 21,000 sqm for sublease across four floors in three pods, creating a rare opportunity for other occupiers to access brand-new, ESG-led space within a flagship HQ building. The Sydney Start-up Hub’s relocation from York Street into the Tech Central precinct at Pitt Street will pull early-stage and scale-up businesses into the same neighbourhood as larger tech corporates, deepening the cluster effect around Central Station. For clients wanting a deeper dive on the numbers, pipeline and tenant mix in Tech Central, we can share our 2025 Tech Deck or you can reach out to our Director, Francois Rollin, for a more detailed discussion. ‍

Size requirements are beginning to stabilise as hybrid workplace models mature and businesses become clearer on how they want people to use the office. Organisations are testing a range of approaches, from anchor days to activity-based and team-led models – but, importantly, most now have a better handle on typical attendance patterns and space needs than they did two or three years ago. This is consistent with what our team, including Associate Director Courtney Magro, is seeing in recent tenant projects, where requirements are being framed with greater confidence around long-term workplace intent rather than short-term experimentation.  The sharp space give-backs of the immediate post-Covid period have eased, and this is now showing up in the sublease market: availability has fallen back below the 10-year average, indicating fewer tenants are carrying large amounts of excess space. Against this backdrop of more right-sized footprints, elevated construction costs and the highest CBD vacancy in around three decades, fewer landlords are willing to deliver full whole-floor speculative fitouts. Instead, they are focusing on lighter refurbishments or smaller suite-style spec, with layouts and capex more closely aligned to increasingly specific, data-driven tenant briefs.

You may have seen the headlines: new office developments in Sydney CBD are drying up, with no new buildings expected in 2026 and only a few slated for 2027. Some are calling it a turning point suggesting that the market is tightening, and tenants should brace for rising rents and shrinking incentives. But is this really the end of tenant-friendly conditions in Sydney’s CBD? Not quite. While this trend may apply to premium-grade assets in the Core CBD, it’s only part of the picture. As François Rollin, Sydney Director, explains:  “Pre-commitments are falling short, especially for larger size requirements. Vacancy rates in Sydney CBD have reached their highest levels since the early 1990s for both A and B grade assets. And with AI reshaping workforce needs, there’s a layer of uncertainty around future office demand.”  Beyond the CBD, the story continues. Just minutes away via Metro, vacancy rates remain high in key suburban markets (23,7% in North Sydney, 30,5% in St Leonards, 17,7% in Chatswood and 18,9% in Macquarie Park) making it great alternatives for tenants looking for more cost-effective solutions.

Sydney’s overall vacancy rate sits at 13.8% as at January 2026, the highest level since the early 1990s and a clear sign that new supply is still running ahead of demand. The picture by grade is quite mixed. A Grade vacancy recently climbed to 17.6% (from 15.2%in January), and B Grade has moved up to 14.4% (from 12.9%), showing continued softness in secondary assets. In contrast, Premium vacancy has tightened to 8.9% (from 9.8%), reflecting tenants’ preference toward the top tier buildings despite broader softness.

Vacancy is also unfolding differently across the CBD. In the Core, Premium space is relatively tight at 8.8%, while A-Grade sits at 15.0% and B Grade at 15.8%. Outside the Core, including the Western Corridor, Southern and Midtown precincts – vacancies are generally in the mid-teens, highlighting softer demand and more choice for tenants in these fringe CBD locations.

Around 101,300 sqm of stock came to market in 2025, the bulk of this being refurbished stock (93,964 sqm), including:

- 270 Pitt St (23,000 sqm) refurbishment
- 1 Kent St (5,300 sqm) refurbishment
- 33 Alfred Street (32,000 sqm,~65% pre-committed) refurbishment
- 121 Castlereagh Street (11,500 sqm, ~70% pre-committed) new development
- 1 Shelley Street (29,500 sqm reintroduced after refurbishment) refurbishment

‍The next substantial supply wave is not until 2027, when more than 170,000 sqm is scheduled at 55 Pitt Street (63,000 sqm, ~35% pre-committed), Atlassian HQ (57,000 sqm, 100% pre-committed) andChifley Tower South (53,000 sqm, ~50% pre-committed). Beyond this, the pipeline is expected to slow as higher construction costs and limited pre-leasing make new projects harder to commence.

Sublease availability in the Sydney CBD has continued to stabilise and is now sitting below historical averages. As of Q4 2025, sublease space accounts for 0.6% of total stock, indicating a further tightening from earlier in the year and a reduced pool of short-term options for tenants. Availability is still dominated by financial services, tech, and professional firms. Notable tranches include:

- 20 Windmill St – 7,355 sqm (Dentsu)
- 30 Windmill St – 3,686 sqm (SiteMinder)
- Darling Park Tower 3 – 5,971sqm (NTT Group)
- 255 Elizabeth Street – 5,388sqm (Navitas)
- 400 George St – 3,462 (CFS)

With growing diversity and motivated landlords, sublease space offers tenants a chance to secure prime locations at competitive rates.

Sublease availability in the Sydney CBD has continued to stabilise and is now sitting below historical averages. As of Q4 2025, sublease space accounts for 0.6% of total stock, indicating a further tightening from earlier in the year and a reduced pool of short-term options for tenants. Availability is still dominated by financial services, tech, and professional firms. Notable tranches include:

- 20 Windmill St – 7,355 sqm (Dentsu)
- 30 Windmill St – 3,686 sqm (SiteMinder)
- Darling Park Tower 3 – 5,971sqm (NTT Group)
- 255 Elizabeth Street – 5,388sqm (Navitas)
- 400 George St – 3,462 (CFS)

With growing diversity and motivated landlords, sublease space offers tenants a chance to secure prime locations at competitive rates.

Some of the recent notable commitments shaping the Sydney CBD market include:
- HWL Ebsworth – 5 Martin Pl (11,023 sqm)
- NSW Government – 252 Pitt St (4,400 sqm)
- CreativeCubes.Co – 347 Kent St (2,718 sqm)
- Snowy Hydro – 225 George St (1,856 sqm)

Growth Concentrating in Tech CentralAustralia’s tech sector continues to scale, with around 40,000 tech companies, more than 1 million jobs and tech spending projected to grow 8.7% YoY, outpacing the broader APAC region. Within Sydney, this growth is increasingly concentrating in Tech Central, anchored by Atlassian.Central, Central Place and the Post House, which together will deliver over 200,000 sqm of new-generation office space targeted at technology and innovation tenants. Atlassian Central alone is a 39-storey, 59,100 sqm Premium tower designed as one of the world’s tallest hybrid-timber office buildings, with an electricity-generating façade, and a fully electric, targeting market-leading Green Star and NABERS Energy ratings. When complete, Atlassian is expected to offer around 21,000 sqm for sublease across four floors in three pods, creating a rare opportunity for other occupiers to access brand-new, ESG-led space within a flagship HQ building. The Sydney Start-up Hub’s relocation from York Street into the Tech Central precinct at Pitt Street will pull early-stage and scale-up businesses into the same neighbourhood as larger tech corporates, deepening the cluster effect around Central Station. For clients wanting a deeper dive on the numbers, pipeline and tenant mix in Tech Central, we can share our 2025 Tech Deck or you can reach out to our Director, Francois Rollin, for a more detailed discussion.

Size requirements are beginning to stabilise as hybrid workplace models mature and businesses become clearer on how they want people to use the office. Organisations are testing a range of approaches, from anchor days to activity-based and team-led models – but, importantly, most now have a better handle on typical attendance patterns and space needs than they did two or three years ago. This is consistent with what our team, including Associate Director Courtney Magro, is seeing in recent tenant projects, where requirements are being framed with greater confidence around long-term workplace intent rather than short-term experimentation.  The sharp space give-backs of the immediate post-Covid period have eased, and this is now showing up in the sublease market: availability has fallen back below the 10-year average, indicating fewer tenants are carrying large amounts of excess space. Against this backdrop of more right-sized footprints, elevated construction costs and the highest CBD vacancy in around three decades, fewer landlords are willing to deliver full whole-floor speculative fitouts. Instead, they are focusing on lighter refurbishments or smaller suite-style spec, with layouts and capex more closely aligned to increasingly specific, data-driven tenant briefs.

Sydney’s overall vacancy rate sits at 13.8% as at January 2026, the highest level since the early 1990s and a clear sign that new supply is still running ahead of demand. The picture by grade is quite mixed. A Grade vacancy recently climbed to 17.6% (from 15.2%in January), and B Grade has moved up to 14.4% (from 12.9%), showing continued softness in secondary assets. In contrast, Premium vacancy has tightened to 8.9% (from 9.8%), reflecting tenants’ preference toward the top tier buildings despite broader softness.

Vacancy is also unfolding differently across the CBD. In the Core, Premium space is relatively tight at 8.8%, while A-Grade sits at 15.0% and B Grade at 15.8%. Outside the Core, including the Western Corridor, Southern and Midtown precincts – vacancies are generally in the mid-teens, highlighting softer demand and more choice for tenants in these fringe CBD locations.

Around 101,300 sqm of stock came to market in 2025, the bulk of this being refurbished stock (93,964 sqm), including:

- 270 Pitt St (23,000 sqm) refurbishment
- 1 Kent St (5,300 sqm) refurbishment
- 33 Alfred Street (32,000 sqm,~65% pre-committed) refurbishment
- 121 Castlereagh Street (11,500 sqm, ~70% pre-committed) new development
- 1 Shelley Street (29,500 sqm reintroduced after refurbishment) refurbishment

‍The next substantial supply wave is not until 2027, when more than 170,000 sqm is scheduled at 55 Pitt Street (63,000 sqm, ~35% pre-committed), Atlassian HQ (57,000 sqm, 100% pre-committed) andChifley Tower South (53,000 sqm, ~50% pre-committed). Beyond this, the pipeline is expected to slow as higher construction costs and limited pre-leasing make new projects harder to commence.

Sublease availability in the Sydney CBD has continued to stabilise and is now sitting below historical averages. As of Q4 2025, sublease space accounts for 0.6% of total stock, indicating a further tightening from earlier in the year and a reduced pool of short-term options for tenants. Availability is still dominated by financial services, tech, and professional firms. Notable tranches include:

- 20 Windmill St – 7,355 sqm (Dentsu)
- 30 Windmill St – 3,686 sqm (SiteMinder)
- Darling Park Tower 3 – 5,971sqm (NTT Group)
- 255 Elizabeth Street – 5,388sqm (Navitas)
- 400 George St – 3,462 (CFS)

With growing diversity and motivated landlords, sublease space offers tenants a chance to secure prime locations at competitive rates.

Sublease availability in the Sydney CBD has continued to stabilise and is now sitting below historical averages. As of Q4 2025, sublease space accounts for 0.6% of total stock, indicating a further tightening from earlier in the year and a reduced pool of short-term options for tenants. Availability is still dominated by financial services, tech, and professional firms. Notable tranches include:

- 20 Windmill St – 7,355 sqm (Dentsu)
- 30 Windmill St – 3,686 sqm (SiteMinder)
- Darling Park Tower 3 – 5,971sqm (NTT Group)
- 255 Elizabeth Street – 5,388sqm (Navitas)
- 400 George St – 3,462 (CFS)

With growing diversity and motivated landlords, sublease space offers tenants a chance to secure prime locations at competitive rates.

Some of the recent notable commitments shaping the Sydney CBD market include:
- HWL Ebsworth – 5 Martin Pl (11,023 sqm)
- NSW Government – 252 Pitt St (4,400 sqm)
- CreativeCubes.Co – 347 Kent St (2,718 sqm)
- Snowy Hydro – 225 George St (1,856 sqm)

Growth Concentrating in Tech Central Australia’s tech sector continues to scale, with around 40,000 tech companies, more than 1 million jobs and tech spending projected to grow 8.7% YoY, outpacing the broader APAC region. Within Sydney, this growth is increasingly concentrating in Tech Central, anchored by Atlassian.Central, Central Place and the Post House, which together will deliver over 200,000 sqm of new-generation office space targeted at technology and innovation tenants. Atlassian Central alone is a 39-storey, 59,100 sqm Premium tower designed as one of the world’s tallest hybrid-timber office buildings, with an electricity-generating façade, and a fully electric, targeting market-leading Green Star and NABERS Energy ratings. When complete, Atlassian is expected to offer around 21,000 sqm for sublease across four floors in three pods, creating a rare opportunity for other occupiers to access brand-new, ESG-led space within a flagship HQ building. The Sydney Start-up Hub’s relocation from York Street into the Tech Central precinct at Pitt Street will pull early-stage and scale-up businesses into the same neighbourhood as larger tech corporates, deepening the cluster effect around Central Station. For clients wanting a deeper dive on the numbers, pipeline and tenant mix in Tech Central, we can share our 2025 Tech Deck or you can reach out to our Director, Francois Rollin, for a more detailed discussion.

Size requirements are beginning to stabilise as hybrid workplace models mature and businesses become clearer on how they want people to use the office. Organisations are testing a range of approaches, from anchor days to activity-based and team-led models – but, importantly, most now have a better handle on typical attendance patterns and space needs than they did two or three years ago. This is consistent with what our team, including Associate Director Courtney Magro, is seeing in recent tenant projects, where requirements are being framed with greater confidence around long-term workplace intent rather than short-term experimentation.  The sharp space give-backs of the immediate post-Covid period have eased, and this is now showing up in the sublease market: availability has fallen back below the 10-year average, indicating fewer tenants are carrying large amounts of excess space. Against this backdrop of more right-sized footprints, elevated construction costs and the highest CBD vacancy in around three decades, fewer landlords are willing to deliver full whole-floor speculative fitouts. Instead, they are focusing on lighter refurbishments or smaller suite-style spec, with layouts and capex more closely aligned to increasingly specific, data-driven tenant briefs.