​​Sydney Office Market Holds Steady as Tenants Prioritise Fitouts and Flexibility​ 

​​Colliers reports a surge in leasing activity across CBD and metro markets, driven by demand for ready-to-occupy spaces and premium-grade assets.​ 

Sydney’s CBD office market is showing signs of resilience despite a slight uptick in vacancy, as demand for premium-grade space continues to surge, driven by a flight to quality and a return to the city’s core. 

New data released in the Property Council of Australia’s Office Market Report reveals that Sydney CBD vacancy has edged up from 12.8% to 13.7%, largely due to the delivery of new supply including 33 Alfred Street, 121 Castlereagh Street and the refurbishment of 1 Shelley Street, totalling 72,600sqm. 

Jock Gilchrist, Head of Office Leasing NSW at Colliers, said, “While vacancy rose, 70% of the new supply was pre-committed, and 33 Alfred Street alone achieved a 93% commitment rate, reflecting robust demand for premium assets. Legal firms such as Allens, Maddocks, Lander & Rogers and Pinsent Masons have expanded their footprint, contributing positively to net absorption.” 

The newly released Colliers’ NSW Office Leasing H1 Report shows that 90% of all transactions during the first half of the year were for fitted space, highlighting tenants’ preference for speed to occupancy and turnkey solutions. 

James Brock, Director in Charge Sydney North, commented, “Our H1 leasing activity reflects an accelerating flight to quality, with deals up 13% year-on-year. Tenants are prioritising fitted space to avoid fitout delays and focus on their core business.” 

In Sydney’s western markets, demand remains strong across Parramatta, Bankstown and Norwest. 
Chris Baltussen, Director Sydney West, noted, “We’re seeing a clear shift in tenant expectations. Businesses want premium, ready-to-go workplaces that elevate the employee experience and allow for immediate usability. This is driving fast decision-making and strong leasing momentum across Metro West.” 

The lease of 6 Parramatta Square to Water NSW, the largest transaction in Parramatta this year, exemplifies this trend, with the tenant committing to over 3,000sqm in a premium-grade building to enhance culture and productivity. 

With premium-grade options tightening, leasing activity is increasingly shifting to A and B-grade stock, a trend expected to continue amid limited upcoming supply.