Over 60,000sqm of new office supply underway in Sydney

In Q4, CBD office completions were offset by withdrawals.

New office supply in the Sydney CBD was largely offset by building withdrawals during the last quarter of 2025, according to JLL.

The firm reported two completions in the CBD totalling 29,600 square metres, alongside four withdrawals totalling 23,600 square metres as some buildings were removed for residential redevelopment and a new entertainment precinct.

Across Sydney’s non-CBD office markets, JLL said four projects were completed delivering 80,800 square metres of new space. The largest was Victoria Cross Tower in North Sydney, which added 57,065 square metres.

JLL added that a further 60,400 square metres of office space is currently under construction across the non-CBD markets.

Here’s more from JLL:

The Sydney CBD recorded 20,500 sqm of positive absorption over Q4 2025. This was driven mainly by large tenant (>1,000sqm) demand with all four precincts in the CBD recording a positive result, driven by Midtown (12,599 sqm).
Five out of the ten Sydney office markets have recorded positive net absorption over Q4 2025. The strongest result outside the Sydney CBD was Macquarie Park, which recorded 15,500 sqm of net absorption while the weakest result was in Parramatta (-15,600 sqm).

Prime yields were unchanged over the quarter in the Sydney CBD market

Sydney CBD Core prime net face rents grew 1.5% over the quarter and by 6.5% over the year to average AUD 1,540 per sqm p.a. Prime incentives reduced marginally to 32.8%. The rate of growth is being supported by solid leasing activity within quality stock.

Rental performance in the non-CBD metro markets was predominantly flat over the quarter, as face rents increased marginally and prime incentives recorded minimal movement. As a result, net effective rents have remained largely unchanged.

Outlook: Vacancy is likely to decrease over the near-term as supply outlook is very limited

The Sydney CBD vacancy rate is forecast to gradually fall over the near term. Tenants are likely to seek higher quality office accommodation and to consider options outside the Core, as there are few quality large contiguous space options available in the precinct.

The Sydney metro markets’ development pipeline continues to dwindle, as elevated vacancy rates and uplift in construction costs have pushed projects out into later years or developers have resubmitted for alternative use on these sites.