With vacancy remaining above pre-pandemic levels, Cushman Wakefield also expects incentives to remain elevated across Australian CBDs next year. While the headwinds from structural change outweighed the tailwinds, the commercial real estate services company also detects signs of resilience within CBD office space.

Within what it regards as a decoupling office market, Cushman Wakefield also believes the centralised location of CBDs relative to non-CBDs – plus the higher share of premium and high-quality A-grade office space – has insulated Australian CBDs from at least some of the upward pressure on vacancy rates.

Key cities – key metrics

Here’s a snapshot of the supply, demand, vacancy, rent and incentive metrics for Australia’s four key office markets included within Cushman & Wakefield’s Australia Office Outlook for 2024.


Tight premium grade vacancy and lack of supply are likely to limit premium net absorption through the 2024 to 2028 period.

This should support a modest increase in A-grade net absorption over this period and help fill any backfill space left vacant from tenants upgrading to new premium supply in 2025 and 2028.

The Brisbane CBD is set to experience robust rental growth through 2028, while incentives may prove to be stickier than in previous cycles and hover between 35% to 45%.

Growth in premium rents is expected to be particularly strong in the 2024-28 period as the continued flight to quality pushes average annual effective rent growth above 6%.

This is predominantly driven by face rent growth, as incentives are expected to only tighten by circa 250 basis points.

Meantime, growth in A-grade rent is expected to lag slightly, averaging around 4% per annum, while B-grade rents are expected to see a steady increase of 2% to 2.5% annually.


Looking ahead, supply is expected to remain fairly limited with only 100,000 sqm and 115,000 sqm of new and refurbished space expected to hit the market in 2024 and 2025 respectively.

A majority of stock (70%) set to complete in 2024 will be premium grade. A similar split is expected in 2026, while 90% of expected 2027 completions are expected to be premium grade.

Pent-up demand from leasing decisions delayed due to covid, will allow for A-grade and second vacancy to hold steady, as occupancy declines at a similar rate to the stock being withdrawn.

Meanwhile, the flight to quality put downward pressure on premium vacancy until a surge in premium supply hits the market in 2027.

Face rents are expected to increase on both premium and A-grade office space as new buildings come online and older stock is withdrawn. However, incentives are expected to remain elevated in prime office space and rise slowly in secondary office space.


New supply due to complete in 2026 will push up incentives, more than offsetting any growth in face rents.

A-grade rental growth should remain stable, with new incentives gradually falling below 50% by 2028.

Secondary rents are likely to come under pressure as tenants upgrade space as the flight to quality put a floor under incentives.


After 175,000 sqm of new office and refurbished office space was completed in 2022, new supply in the Sydney CBD was limited to circa 90,000 sqm in 2023.

Supply is set to spike in 2024, headlined by the completion of 1 Elizabeth Street (NLA circa 70,000 sqm).

Total supply is expected to exceed 300,000 sqm, although circa 40% of this has been pre-committed, and will exert some upward pressure on vacancy.

The pipeline for 2025 and 2026 is more limited at 90,000 sqm combined.

This should allow for the market to absorb the spike in supply before supply reverts to long-term average levels in 2027.

The ongoing flight to quality will support premium grade net absorption in the 2024-28 period.

As a result, there is likely to be downward pressure on premium vacancy while A-grade vacancy will remain elevated.

Secondary stock should start to trend lower as older stock is withdrawn for refurbishment.

Incentives in A-grade and secondary office space are expected to be sticky as more potential tenants will likely be more attracted to recently completed premium space.

Given tenants’ continued preference towards quality over cost, premium properties are likely to see quicker rental growth than other grades through 2026.