Melb office tops Q2 rent growth – Parramatta breaks $500/sqm

Q2 2018 rental charts East Coast

Cushman & Wakefield has just released their Q2 office research for Melbourne, Sydney and Brisbane CBD and a separate look at fringe markets, showing that Melbourne has seen the strongest increase in rents in the past year, rising 13% to $580/sqm.  Highlights below and chart tracking CBD markets attached.

It’s also the first time they have focused on the metro/fringe markets with all reports attached, including major deal listings.


Melbourne CBD/fringe

  • Prime gross effective rents are at $580/sqm at the end of Q2 – a 13.3% year-on-year increase. Net incentives steadied at 28%.
  • Cushman forecasts indicate that Melbourne CBD vacancy could sink to below 4% in the second half of 2018.
  • Southbank remains one of Melbourne’s tightest markets with rents rising 15% YoY to $450

Sydney CBD/metro

  • After strong growth in the first quarter, Sydney gross effective rents paused for breath remaining stable at $955/sqm and B-grade at $755/sqm
  • Parramatta cements is place as Sydney’s second CBD with rents breaking $500/sqm in Q2
  • Tech firms are targeting fringe markets including Surry Hills and Darlinghurst, with Grade A net face rents averaging $675/sqm per annum, and Pyrmont at $655/sqm  – 30% less than the CBD.

Brisbane CBD/fringe

  • Brisbane Q2 gross effective rents are at $448 in Q2
  • Announcements concerning nearly 25,000 sqm of space were made in Q2
  • Despite the high level of vacancy overall, larger tenants of over 2,500 square metres (sqm) are struggling to find grade-A space
  • Limited supply under construction, stock withdrawal and improving tenant demand are forecast to provide downward pressure on vacancy over the next 18 months

Read and download the full research here.