Market Pulse CBD June-26 pages - Flipbook - Page 8
Market Pulse Sydney CBD Office Market
Tenant Demand
Net Absorption
Modest, yet positive, net absorption of 11,359sqm was recorded over H2 2025 after an equally modest tally of
10,298sqm in H1, resulting in the 2025 total (21,657sqm) being just 58% of the long-term average (of 37,074sqm).
The Core (14,183sqm) and Midtown (5,194sqm) led the CBD precincts for net absorption over the last six months.
But we expect Midtown and Western Corridor to outperform in coming periods as tenants seek value in precincts
that have more available space.
Net absorption by building grade was led by A grade (42,189sqm last 6 months) followed by Premium (14,489sqm),
but over a 12-month period this was reversed with Premium outperforming A grade. As a result of low vacancy and
strong rental growth experienced by Premium grade, leading to a widening of the Premium/A grade rental gap, we
expect more tenant demand in A grade compared to Premium, over the next few periods.
Annual Net Absorption - Sydney CBD 1990-2025
8 | cadigal.com.au
