Property Forecasting > Report
Vacancy rates and leasing incentives in the Sydney CBD office market have risen further in H2 2021, while effective rents are still falling. However, the worst is over, with a market trough expected in Q2 2022. The recovery will take some time, held in check by repeated supply spikes until 2026. As oversupply is gradually absorbed, we expect effective rents to rebound – but only reach 15% above pre-pandemic levels (prime) by 2031. With little further yield firming to come to boost values, 5-year IRRs are modest.
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