CBD Office: Slightly more than 150,000 square metre (sqm) of new and refurbished space is anticipated to come online in the Sydney CBD over 2022. Leasing activity remained solid and rents generally stable in Q4 2021. The average Prime grade incentive remains at 35% and gross face rents continue to average $1,355 sqm per annum (pa). Although the Omicron variant has increased the downside risk to this forecast in the short term, barring further economic restrictions growth may be pushed back into the second half of 2022.
Metro Office: Rental conditions in Sydney office markets have stabilized do a degree after a period of weakness caused by the COVID-19 pandemic. Incentives remain elevated and continue to drift higher across most sub markets. Tighter conditions are beginning to emerge in some pockets of the market, such as North Sydney Prime. After more than 300,000 square metres (sqm) of new office space hit Sydney metropolitan office markets during 2020 and more than 200,000 sqm during 2021, only 120,000sqm of new supply is set to hit the market over the next 24 months.
Industrial: NSW and Australia continue to bounce back from the 2020 COVD-19 induced recession. Although the recovery carries on, the sequential growth impulse has faded slightly, with data to June 2021 showing the national economy expanding at 1.9% in Q1 and 0.7% in Q2 after increasing at more than 3% in both Q3 and Q4 2020. Real state final demand in New South Wales (NSW) remains robust, increasing 1.9% in Q1 and 2.2% in Q2
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