Australian office sublease availability declined 19.42% during 2021, finishing the year with a stable fourth quarter.  

According to CBRE, national sublease availability fell from 426,000 sqm to 343,241 sqm last year, ending the year with a 0.4% quarter-on-quarter drop in Q4.  

The Adelaide and Perth markets drove that fourth quarter decline, with q-o-q reductions of 42.7% and 41.3% respectively.  

Following the extended lockdowns, sublease supply in Sydney and Melbourne rose 10.7% and 3.7% respectively during the final quarter of 2021.  

Source: CBRE

Mark Curtain, Head of Investor Leasing – Pacific at CBRE, said there was no doubt that a sense of stability had entered the sublease market throughout 2021.  

“While we anticipate mild fluctuations throughout the course of 2022, as larger corporate occupiers start to implement their long-term office accommodation strategies, the downward trend of the national sublease market will continue,” Curtain said.  

“Sydney led the recovery last year with total sublease availability reducing by 41.1%.  

“Melbourne’s sublease supply is still the largest in the country with 192,588 sqm, representing 56% of total availability.  

“It is likely to headline the national sublease recovery in 2022 with strong supply led deal activity, as opportunistic tenants take advantage of favourable financial arrangements.” 

Source: CBRE

Tim Courtnall, State Director, Office Leasing at CBRE, said transaction volumes were very strong in Sydney last year, with demand from finance, IT and government sectors contributing significantly. 

“With headcount growth back on the agenda and confidence in the return to the office, we have seen a steady decline in the overall sublease availability to circa 99,000 sqm,” Courtnall said.  

“Despite the headwinds of inflation, stock market wobbles and geo-political concerns, we are coming into Q1 2022 with optimism.  

“We further anticipate larger organisations like the banks and legal firms rationalising their footprint, however the growth from the government and technology will provide ample demand across the market.” 

Source: CBRE

Ashley Buller, Head of Office Leasing, Victoria at CBRE, said the Q3 trends had continued into Q4 in Melbourne, with the Southern Cross precinct generating strong sublease interest.  

“A number of Heads of Agreement were agreed within this precinct in late Q4, which will be reported on Q1 2022,” Buller said. 

“These deals are reflecting exceptionally good value to the incoming tenant and make up a strong percentage of the larger transactions taking place within the Melbourne CBD.  

“There is further hidden sublease space which will come to market in Q1 2022. 

“These Sublessors have spent the last 12-18 months analysing the way their employees have been returning to work, their space needs, and finally have the clarity to offer their space to the market. 

“Additionally Sublessors bringing new space to market at this time are typically highly attuned to recent transactions and will likely offer their space on attractive terms reflective of recent deals.”