CBRE’s sublease barometer shows central business district office sublease volumes decreased

The tighter environment shows that companies have stopped slashing space.

The report showed sublease availability rates in Sydney remained flat over the quarter. Picture: Saeed KHAN / AFP

National central business district office sublease volumes decreased to 200,304sq m in the September quarter – the lowest level since early 2021 and nearing pre-pandemic levels.

CBRE’s sublease barometer shows that national sublease volumes fell 44,703sq m – or about 18.2 per cent – over the quarter.

Sublease volumes in Melbourne plunged by 34.3 per cent and Brisbane declined by 21.8 per cent. They said that subleasing volumes in Perth and Adelaide increased by 25.2 per cent and 1.2 per cent respectively.

The report showed sublease availability rates in Sydney remained flat over the quarter with a rate of 1.6 per cent.

CBRE associate director of NSW research Thomas Biglands said that national declines were “primarily driven by a reduction in sublease listings in Melbourne and Brisbane due to leasing activity in listed space, the reclassification of some sublease space as direct availability, and the withdrawal of some sublease space by occupiers”.

The report notes the slowing of listings from large corporate occupiers in the first half of 2024 continued in the last quarter.

The average size of subleases shrunk to 1565sq m – a quarter-over-quarter decline of 26.5 per cent.

This average is nearing pre-pandemic levels and is the lowest average figure since 2021.

The report highlights the largest contributors to sublease availability in the third quarter were the finance and insurance sector and technology, media and telecommunications sector. Volumes in each of these sectors declined over the past three months.

CBRE Pacific head of office leasing Tim Courtnall called out the shift away from cutting space among large companies.

“These sectors accounted for a combined 52.7 per cent of the national volume in the third quarter,” he said.

“These sharp declines in sublease volumes suggest the right-sizing cycle by corporate occupiers is nearing an end. We are also seeing a number of larger occupiers look through the current economic headwinds and start to think about future headcount growth. The other key contributing factor is the proactive approach of landlords assisting their customers.”