30 | Insights H1 2025 Chris Nicholl of Commercial Sydney, says as property markets return to growth, core assets in Sydney’s CBD are likely to lead the way, enjoying sustained tenant demand and lower vacancy rates. This will likely be driven, in part, by the sheer weight of global capital invested in Australia’s largest property market. While Chris sees good news ahead for core assets, secondary offices are expected to face continuing headwinds. With interest rates likely to remain higher for longer, the cost to reposition older assets will remain a challenge. That said, failing to improve an asset’s visual appeal, services performance and ESG credentials will likely result in lower rents and/or higher vacancies in the medium term. Despite these challenges, Chris says, “We envisage secondary buildings that are well-situated relative to public transport and amenity will increasingly be of interest to investors who have the financial capacity to reposition such assets to cater to demand for high quality assets.” More broadly, Chris points to Arealytics data showing 253 leases were taken up in the Sydney CBD in the second half of 2024, highlighting the overall good health of the commercial market. Sydney CBD Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $450-$2,200 n/a $500-$2,000 Vacancy 11% n/a 8% Yields 6-7.25% n/a 5.75-8.75% Rates p/m² $8,000-$30,000 n/a $7,500-$30,000 Current market conditions Price Confidential 97-99 Bathurst Street, Sydney Recent Notable Transactions LEASED Price Confidential 50 Margaret Street, Sydney LEASED Chris Nicholl chris.nicholl@sydneycbd.rhc.com.au For more information, contact:
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