Robust demand limited new supply, and expansion-driven leasing push CBD vacancy to its lowest level in years.
Adelaide’s CBD office market continues to outperform national benchmarks, recording the largest decline in vacancy across all capital city CBDs in the latest Property Council of Australia (PCA) Office Market Report. The vacancy rate fell from 16.4% to 15% in the six months to July 2025, marking the third consecutive period of improvement.
James Young, Colliers State Chief Executive and National Director | South Australia, said, “Adelaide’s CBD vacancy rate experienced the largest reduction in vacancy across the CBD markets in the latest PCA results, dropping by 1.4 percentage points. The absence of new supply and robust underlying demand has underpinned the H1 2025 result. Net absorption has been boosted by new business divisions in the CBD, companies relocating from outside the CBD, and expansionary activity.”
Colliers’ Q2 2025 Office Snapshot highlights a 40% increase in occupier activity for spaces over 500 sqm compared to the previous half-year, with A-grade assets continuing to attract strong interest. Regenerated buildings such as 100 King William Street, 30 and 45 Pirie Street, and 55 Currie Street are outperforming newer developments, offering quality space without premium rents coupled with competitive incentives.
“Looking ahead, new supply remains limited, with only one project, 50 Franklin Street, completed in July 2025 and currently showing a modest pre-commitment rate of around 17%. As a result, the vacancy rate is expected to uplift in the second half of 2025,” Mr Young added.
Beyond 2025, the next wave of supply will be led by Market Square (22,000 sqm) and King William Tower (55,000 sqm), due for completion in mid-2026 and late-2027 respectively. Market Square has already achieved a pre-commitment rate of around 60%, leaving fewer than 10,000 sqm available for lease.
Despite higher A-grade vacancy, contiguous spaces of 5,000 sqm or more are limited to just five buildings across the CBD, underscoring the tightness of the market for large occupiers. Only two buildings offer 10,000 sqm or more of contiguous space. Sublease vacancy remains low, and demand continues to be driven by expansion and consolidation, particularly among tenants seeking modern, high-quality environments.
The PCA notes that Adelaide’s upcoming supply represents just 2.7% of total CBD stock, with 55% already pre-committed. This restrained pipeline, combined with sustained demand, positions the city well to navigate broader market headwinds.
“With business confidence improving and interest rate cuts supporting economic activity, Adelaide’s office market is expected to remain resilient through the remainder of 2025,” concluded Mr Young.
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