Eight office projects currently under construction in Sydney CBD

These projects will add 244,100sqm to the city’s stock.

There were no completions and multiple withdrawals over the quarter in the Sydney CBD which were associated with the Halo development site on Hunter Street. According to data from a JLL report, there is 244,100 sqm of stock under construction across eight projects with delivery between Q2 2025 and Q4 2027.

“There were two completions in the non-CBD office markets. Infinity Park, 7 Maitland Place (4,300 sqm) completed in Norwest and The Connect, 34 Hume Street (3,100 sqm) completed in Crows Nest. There is currently 167,100 sqm under construction in the non-CBD markets,” the report said.

Here’s more from JLL:

The Sydney CBD recorded 6,000 sqm of positive net absorption over Q1 2025. This was driven mainly by small tenant (1,000 sqm) downsized slightly on a net basis.

Five out of the 10 Sydney office markets recorded positive net absorption over Q1 2025. The strongest result in the non-CBD markets was Norwest, which recorded 10,900 sqm of net absorption while the weakest result was in Macquarie Park (-10,400 sqm).

Prime yields were unchanged over the quarter across the Sydney office markets

Sydney CBD Core prime net face rents grew 2.5% over the quarter and by 5.7% over the year to average AUD 1,481 per sqm p.a. Prime incentives reduced further to 33.1%. The reduction in incentives was mainly driven by Premium Grade stock in the Core.

Rental performance in the non-CBD metro markets was mixed over the quarter, as some markets continue to see prime incentives increase further in the high 30% or low 40% range such as St Leonards and Chatswood which has negatively impacted effective rents.

Outlook: Vacancy rate has peaked in the Sydney CBD

The Sydney CBD vacancy rate is forecast to continue gradually trending downwards over 2025 as major supply completions are limited to 33 Alfred Street (30,700 sqm) and 270 Pitt Street (22,700 sqm) while tenant demand remains steady.

The Sydney metro markets’ development pipeline is smaller and continues to shrink, as increases in construction costs and elevated vacancy rates have shelved projects into later years or changed their use to alternative uses.