Property Council NSW Executive Director Katie Stevenson said Sydney's CBD and surrounding commercial centres remain critical drivers of the economy, but targeted efforts are needed to boost their vibrancy and tenant appeal.
"The Sydney CBD is the beating heart of our economy, and surrounding commercial hubs including Chatswood, North Sydney and Crows Nest/St Leonards play a vital role in supporting investment, jobs and talent," Ms Stevenson said.
"With significant new supply on the horizon and demand for high-quality spaces rising, we need to focus on initiatives that attract workers back to the office, create thriving urban centres, and make commercial areas more appealing to businesses and employees alike," Ms Stevenson said.
The latest Office Market Report for the six months to January 2025 reveals:
- Sydney CBD vacancy rates rose from 11.6 per cent to 12.8 per cent, primarily driven by an influx of new office supply.
- Positive tenant demand in premium-grade offices helped offset some of the vacancy increase, reflecting a strong "flight to quality".
- Sydney's short-term supply remains strong, with major projects such as 1 Shelley Street (32,000 sqm, 2025), 8-10 Lee Street (58,000 sqm, 2026), and 37-55 Pitt Street (63,000 sqm, 2027) set to reshape the office landscape.
- Chatswood experienced a decrease in vacancy but remained high at 17.7 per cent, underscoring the need for reinvestment to attract tenants as businesses prioritise high-quality, accessible spaces.
- North Sydney saw stable performance, benefiting from its location and strong transport links, but faces ongoing pressure from new supply in both CBD and non-CBD markets.
- Crows Nest/St Leonards saw a rise in vacancy rates, reflecting slower tenant demand, though upcoming infrastructure projects like the Metro City and Southwest line are expected to drive long-term growth.
Ms Stevenson highlighted the importance of both the CBD and non-CBD markets working together to strengthen Sydney's position as a global city.
"With Metro City improving connectivity, investment in night-time economy initiatives, and a clear trend towards premium office spaces, we are laying the foundations for a resilient and globally competitive Sydney," she said.
