Adelaide office absorption drops to 3,600sqm in Q2

It was almost halved from the prior quarter.

In a recent report, JLL revealed that the Adelaide office market’s net absorption totalled 3,600 sqm in Q2 2025, down from the previous quarter’s reading of 7,500 sqm. On a rolling annual basis, net absorption in the Adelaide CBD is 35,100 sqm.

“The headline vacancy rate decreased 0.3 percentage points (pps) to 14.8% over the quarter. The prime grade vacancy rate also decreased 0.8 pps to 12.5%, driven by centralisation and expansionary activity by large occupiers (>1,000 sqm).”

Here’s more from JLL:

No major completions were recorded over the quarter in the Adelaide CBD. There are currently two projects under construction in the supply pipeline, totalling 42,700 sqm, and two projects with plans approved, totalling 52,300 sqm.

A 21,000 sqm office tower developed by Kyren Group at 50 Franklin Street is set to be completed in Q3 2025. Additionally, ICD Property is developing the 21,700 sqm Market Square Office Tower on Grote Street, anticipated to be completed by Q3 2026.

Yields are unchanged over the quarter

Average prime net face rents decreased 0.2% over the quarter to AUD 492 per sqm p.a. but reflected year-on-year growth of 1.8%. Average prime net effective rents decreased 1.6% to AUD 188 per sqm p.a., with year-on-year growth declining 1.3%.

Average prime midpoint yields were stable at 7.75% over the quarter. There remains a spread between buyer and vendor expectations, but this gap has narrowed over the past 12 months. Average prime midpoint yields were also stable on an annual basis.

Outlook: Demand expected to remain positive, but subdued over the short term

Near-term demand levels are expected to be supported by businesses expanding and centralising to the Adelaide CBD. It is also expected that preference will remain for quality prime stock.

Investors are likely to remain selective in terms of potential acquisitions due to broader global economic uncertainty. Prime office yields have reached the end of the softening cycle and are forecast to be stable throughout 2025.