Adelaide CBD office vacancy falls as net absorption rebounds in Q4

Net absorption reached 13,300sqm during the quarter.

The Adelaide CBD office market recorded a strong rebound in net absorption during Q4 2025, reaching 13,300 square meters, up from just 3,500 square meters in the previous quarter, according to JLL. On a rolling annual basis, net absorption in the CBD totaled 27,900 square meters, reflecting a sustained improvement in tenant activity.

Headline vacancy in the CBD decreased 0.8 percentage points over the quarter to 14.9%, while prime grade vacancy fell 1.4 percentage points to 13.4%. JLL attributed the reduction to expansionary activity by large tenants occupying more than 1,000 square meters, signalling a growing demand for premium office space in central locations.

Despite the positive absorption, the supply pipeline remains relatively soft. No major developments were completed during the quarter, and only one project is currently under construction: Market Square, a 21,700 square meter office tower by ICD Property on Grote Street. This building, part of a broader mixed-use residential and retail development, is already 58.5% pre-committed and is expected to be completed in Q3 2026. Additionally, two projects with planning approval totalling 84,000 square meters are in the pipeline.

Average prime net face rents increased modestly by 0.1% over the quarter to AUD 497 per square meter per annum, reflecting year-on-year growth of 0.7%. Prime net effective rents remained stable at AUD 189 per square meter per annum, although year-on-year growth declined by 2.8%. Average prime midpoint yields were unchanged at 7.75% on both a quarterly and annual basis, with JLL noting that the gap between buyer and vendor expectations has narrowed over the past 12 months.

Looking ahead, JLL forecasts that occupier demand is likely to remain positive in the near term, supported by businesses expanding and centralising operations in the Adelaide CBD. However, net absorption is expected to be lower than the robust levels seen over the past three years. Investor activity is anticipated to remain selective amid broader global economic uncertainty, while prime office yields are expected to stabilise following the end of the recent softening cycle.

JLL concluded that the Adelaide CBD market continues to demonstrate resilience, with positive tenant demand and limited new supply helping to support both occupancy and rent levels in the short term.