CBRE have issued their latest National Sublease Barometer showing that availability remained relatively stable throughout Q4, decreasing by 0.4% q-o-q to approximately 343,241sqm. This represents a 19.42% decline throughout 2021, as availability was just under 426,000sqm in December 2020.
The national quarterly decrease was driven by Perth and Adelaide, registering reductions of 41.3% and 42.7% q-o-q respectively, and both markets reaching their lowest level since June 2020. Brisbane remained unchanged in Q4, while Sydney and Melbourne markets experienced increases of 10.7% and 3.7% q-o-q respectively, after extended lockdowns throughout Q3.
Key Highlights iclude;
- National sublease availability fell 19.42% through 2021, from 426,000sqm to 343,241sqm, after another 0.4% q-o-q drop in Q4
- Adelaide and Perth drove that Q4 drop, with q-o-q reductions of 42.7% and 41.3% respectively
- On the back of the extended lockdowns, Sydney and Melbourne sublease supply rose 10.7% and 3.7% respectively during Q4
- Even with that, Sydney sublease availability still fell by 41.1% during 2021, from 167,907sqm to 98,847sqm
- At 192,588sqm, Melbourne accounts for 56% of all sublease availability, followed by Sydney’s 98,847sqm for 29%. At the other end of the spectrum, Adelaide is down to 4,900sqm for just 1.5%
Mark Curtain, Head of Investor Leasing said “There is no doubt that a sense of stability 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.”
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 192,588sqm, 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.
Sublease increases have stabilised across most markets in 2021, with some showing strong recovery, and new additions are now at much lower levels in markets where they have not ceased. We can expect that sublease availability will remain fluid throughout 2022 but continue to contract, as improved leasing sentiment and minimal lockdowns will enable occupiers to more clearly implement real estate strategies.
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