A cautious approach to commercial property has started to leave the market, according to CBRE’s Sublease Barometer report.
First quarter results reflect growing confidence from Australia’s office occupiers, with the report revealing sublease availability across the nation is currently totalling 417,030sqm – new sublease additions have begun levelling from previous peaks in all markets.
Sublease availability remained high in the first quarter, with availability in Brisbane, Perth and Melbourne recording increases of 11.6 per cent, 3.4 per cent and 0.5 per cent, respectively. Adelaide recorded a -24 per cent decline, followed by Sydney’s -6.5 per cent fall.
While sublease space levelled out across most industries, education and training, transport, postal and warehousing, and manufacturing increased 124 per cent, 73 per cent and 17.6 per cent, respectively.
The largest falls were construction (53 per cent), administrative and support service (41 per cent) and utilities service businesses (22 per cent).
By size range, the sub-500sqm bracket made up the bulk of the available sublease by the number of tenancies.
The 1,000-2,000sqm segment continued to expand and increased by 23 per cent across 58 tenancies (compared to 49 tenancies in December), while the over 2,000sqm bracket recorded a 9 per cent fall across 51 tenancies (compared to 55 tenancies in December).
CBRE’s head of office leasing for pacific Mark Curtain said he expects the sublease market to peak in 2021 (total sqm) and gradually reduce over the back end of the year to pre-pandemic levels.
“The challenge of future workplace occupancy remains on the agenda, with the emerging trend in hybrid workplace models – a trend that will see occupier’s future real estate portfolios defined by flexibility, in terms of workplace format as well as lease terms,” he said.
“An increase in desk ratios could also have a positive effect on sublease withdrawals as occupiers readjust their use of office space and initial expectations of space reductions are diminished.”
