Over 175,000sqm new office space currently underway in Sydney

All of this new stock will be in the CBD.

Sydney's office market recorded positive net absorption of 25,400 square metres in Q1 2026, while the overall vacancy rate remained unchanged at 21.5%, according to JLL.

The consultancy said the Sydney CBD continued to generate the strongest demand, although several non-CBD markets remained challenged. Prime gross effective rents increased 3.9% during the quarter, supported by tenant demand for high-quality CBD office space.

Only one office completion was recorded across Sydney during the quarter, adding 4,500 square metres in Parramatta. JLL said 175,600 square metres remains under construction, with all future supply concentrated in the CBD.

Investment activity totalled AUD1.2 billion during Q1, with most transactions occurring in non-CBD markets, particularly North Sydney. Prime CBD yields compressed on the back of sales of premium-grade assets, while non-CBD yields remained stable.

JLL expects a low-supply environment over the next two years, with elevated construction costs and development hurdles likely to support leasing demand for existing high-quality office stock and contribute to lower prime vacancy rates.