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Base Year
Historical Year
Forecast Year
Value in USD million
2024-2032
Australia Office Rental Market Outlook
*this image is indicative*
The Australia office rental market is experiencing growth as office rentals offer flexible lease agreements, enabling businesses to adjust their space without long-term commitments, which is perfect for startups. Renting is generally more cost-effective than buying, allowing for better capital allocation. Moreover, it provides access to prime locations and includes amenities such as meeting rooms and internet, further enhancing operational efficiency and impacting the growth of Australia office rental market. As reported by the ABS, employment in Australia reached 14,458,600 in August 2024, with the employment-to-population ratio rising to 64.3%. This increase in employment usually leads to a higher demand for rentals, as businesses grow and seek additional office space.
Office rentals provide scalability, allowing businesses to modify their space according to their needs and opportunities. Maintenance is usually the landlord's responsibility, enabling companies to concentrate on their core activities. Shared spaces facilitate networking, and rental payments can often be deducted as business expenses, improving cash flow and financial advantages, which boosts the Australia office rental market revenue. The Department of Finance's 2023 Occupancy Report indicates improved efficiency in the Commonwealth's property portfolio, with national occupational density at 13.4m² and the percentage of tenancies meeting the density target rising from 44.3% in 2022 to 48.7% in 2023.
The Australia office rental market is growing, driven by rising demand from expanding businesses, flexible leasing options for startups, and a transition to hybrid work models that require adaptable spaces. Government investments in infrastructure enhance access to commercial areas, drawing tenants to previously less desirable locations. According to the ABS, the number of approved dwellings in July 2024 rose by 10.4% compared to July 2023, reaching a total of 14,797. Additionally, the value of non-residential building permits increased by 3.2% to $4.69 billion, increasing the Australia office rental industry revenue, as new non-residential properties often include modern amenities and sustainable designs, making them attractive to businesses seeking flexible and efficient work environments.
Emerging technology hubs in cities like Sydney and Melbourne are driving demand for modern office spaces. The Australia office rental market dynamics and trends are being driven by businesses looking for spaces equipped with modern amenities and sustainable features, leading to a growing demand for environmentally friendly rentals. In September 2022, sustainability-focused prime offices in Australia’s major markets outperformed the broader office sector over 13.5 years. Green Star-rated offices in Sydney, Melbourne, and Brisbane achieved higher total returns, lower vacancy rates, and reduced operating costs, driven by increased institutional demand for green buildings to meet health and carbon reduction goals.
February 2024
The Great Room by Industrious launched its inaugural Australian branch in Sydney, transforming the coworking scene with its elegant design and hospitality-driven approach. This collaboration with flexible workspace providers sought to enhance occupancy in commercial spaces, enabling large corporate tenants to reduce their leased areas while enjoying versatile coworking solutions.
December 2024
Hines announced the successful completion of its mass timber office building in Melbourne, built with sustainably sourced Victorian Oak, which led to a decrease of 2,850 tonnes of CO2 emissions compared to standard concrete constructions. This timber structure offered an employee-centric workspace to attract and retain talent, fulfilling the need for high-quality, eco-friendly office environments.
Government Initiatives
The Australia office rental market is witnessing key trends shaped by government initiatives focused on sustainability, economic recovery, and urban development. Policies promoting green building practices are increasing demand for energy-efficient office spaces, supporting national climate objectives. Government investments in infrastructure enhance access to commercial areas, attracting interest in previously underused locations. Moreover, initiatives supporting small businesses and startups are driving the expansion of flexible office spaces, such as co-working environments, which, in turn, is fueling the office rental demand growth. The Australian Government Property Register (AGPR) provides annual updates on leased office spaces used by non-corporate Commonwealth entities, helping improve management and ensure alignment with current and future needs.
Integration of Technology
The Australia office rental market is experiencing growth due to the integration of advanced technology in office spaces. Buildings equipped with IoT devices, automated systems, and improved connectivity are increasingly in demand. Tenants seek environments that facilitate remote collaboration, streamline operations, and enhance employee experiences. This technological evolution boosts productivity and operational efficiency, making tech-enabled properties more appealing. In response, landlords are investing in infrastructure that provides high-speed internet, collaboration tools, and security systems, further driving demand of the Australia office rental market. In May 2024, BlueScopeX, the corporate venture capital arm of BlueScope, joined the Australia Green Economy Innovation Challenge (AGEIC) organized by Enterprise Singapore, which aimed to fund innovative technologies for sustainable construction. Launched in late April 2024, AGEIC connected startups and SMEs with leading Australian companies to tackle significant sustainability challenges across various sectors. BlueScopeX assessed proposals focused on improving the thermal performance, carbon footprint, and sustainability of industrial and commercial buildings throughout their entire lifecycle.
Increased Demand for Flexible Spaces
The Australia office rental market is experiencing a notable shift towards flexible leasing options, fueled by the growth of remote and hybrid work models. Companies are seeking adaptable spaces that allow them to scale their operations as needed. This trend in the Australia office rental market has increased to co-working spaces and serviced offices, catering to both startups and established businesses. As firms prioritize agility, the demand for flexible office solutions is expected to rise, impacting rental agreements, and driving innovation in workspace design. In January 2024, Hub Australia launched a luxury-focused flagship location at 44 Martin Place in Sydney, targeting companies that are downsizing yet still require meeting and learning spaces on a flexible basis. Corporations using IWG-managed flexible spaces have shifted to signing 12- to 18-month leases, compared to the six- to nine-month leases seen in 2022 in CBD areas.
The Australia office rental market faces several key restraints. Economic uncertainty can diminish business confidence, reducing demand for long-term leases. High vacancy rates in older or less desirable buildings deter investment and lower rental prices. Regulatory challenges complicate leasing due to compliance requirements.
Additionally, remote work trends decrease demand for traditional office spaces, while landlords are required to invest in upgrades to meet tenant expectations. The rise of flexible workspaces intensifies competition, and rising operational costs can drive businesses to seek cheaper alternatives. Finally, market saturation in some urban areas makes it difficult for landlords to fill vacancies and maintain rental yields.
Australia Office Rental Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:
Market Breakup by Property Type
Market Breakup by Region
By Property Type Analysis
The Australia office rental market is growing as high-rise commercial buildings optimize space by accommodating numerous office units in crowded urban areas. Their height enhances visibility, attracting businesses in search of prestigious locations. These buildings feature modern amenities and advanced technologies that boost efficiency and comfort. Their location near public transport improves accessibility, promotes sustainability with green features, and supports Australia office rental market development. In April 2024, a $2 billion skyscraper project was approved to become Australia's tallest building. The Victorian government recently approved the Southbank development, which will include a twisted tower, apartments, offices, a luxury hotel, and 6,000 square meters of green space. Named STH BNK by Beulah, the project will consist of two towers, with one expected to surpass the Gold Coast’s 322.5-meter-tall Q1 building as the tallest skyscraper in the nation.
The Australia office rental market is thriving as business parks offer flexible leasing arrangements suitable for both startups and established companies, fostering networking and collaboration among tenants. These parks enhance the tenant experience with shared amenities such as meeting rooms and recreational spaces. Strategically positioned near major transport routes, they provide convenient access for employees. Additionally, they tend to be more cost-effective than rentals in city centres, making them attractive to budget-conscious firms while promoting innovation and technology that draw R&D-focused organizations, further driving demand in the Australia office rental market. In August 2024, Aware Real Estate, in collaboration with Barings, purchased the Austrak Business Park located in Somerton, a northern suburb of Melbourne, for A$600 million ($405 million). This acquisition enhances Aware Real Estate’s industrial presence in Victoria and supports its strategy of acquiring strategically located assets with reliable tenants and potential for value enhancement through development.
The Australia office rental market varies by region, reflecting local employment trends. Sydney and Melbourne see high demand for premium, flexible spaces, while Brisbane offers more affordable options. Perth and Adelaide focus on modern amenities, and Canberra's market caters to government needs, highlighting a nationwide shift toward sustainability.
In August 2024, employment in Australia rose to 14,443,600, an increase of 40,300 people or 0.3% from July 2024. Year-on-year, the employment figure grew by 362,800, reflecting a 2.6% rise. Additionally, total monthly hours worked across all jobs increased by 3 million, reaching 1,958 million hours, a 0.2% rise. Compared to the previous year, total monthly hours worked rose by 24 million, equating to a 1.3% annual growth. This surge in employment and hours worked is driving growth in the Australia office rental industry, particularly in cities like Sydney, Melbourne, and Brisbane, where high vacancy rates can create competitive rental prices, favouring flexible work options.
The key players in Australia office rental market focus on linking businesses with flexible office solutions, such as coworking spaces and private offices. These platforms enable users to search for customized work environments that meet diverse needs, making comparisons and bookings straightforward. Their goal is to streamline the office rental process, assisting both startups and established companies in locating spaces that boost productivity and collaboration.
Officespace.com: Established in 2014 and headquartered in Sydney, Australia, is an online platform that connects businesses with flexible office spaces. It offers a wide range of coworking and private office solutions, enabling companies to find tailored work environments that meet their specific needs for growth and collaboration.
Anytime Offices Pty Ltd: Founded in 2013 and based in Melbourne, Australia, Anytime Offices Pty Ltd specializes in providing flexible office solutions, including serviced offices and coworking spaces. The company focuses on delivering modern, fully equipped workspaces designed for businesses of all sizes, promoting productivity and collaboration in a dynamic environment.
Jones Lang LaSalle IP, Inc.: It is commonly known as JLL, is a global real estate services firm established in 1783, with its headquarters in Chicago, Illinois. JLL offers a comprehensive range of services including office leasing, property management, and investment management, catering to diverse client needs across the commercial real estate sector.
Christie CoWork Pty Ltd: Founded in 2017 and headquartered in Melbourne, Christie CoWork Pty Ltd provides innovative coworking spaces designed for freelancers, startups, and established businesses. The company emphasises community building and collaboration, offering modern facilities, networking opportunities, and a range of services to enhance the work experience for its members.
Other key players in the global Australia Office Rental market report include Servcorp Limited, REA Group Ltd., Instant Offices Limited and Regus Group Companies, among others.
March 2024
Tank Stream Labs launched upscale office spaces in Sydney's Australia Square, partnering with The Nudge Group to compete with major players like WeWork. The new Tank Stream Suites offered 23 offices for teams of two to 25, catering to fast-growing startups needing privacy for sensitive data management.
May 2023
Mitsui O.S.K. Lines, Ltd. announced that Daibiru Corporation, part of the MOL Group focused on real estate, signed an agreement with Mirvac Limited, a prominent Australian property development and management firm, to engage in an office building project in Melbourne's central business district.
*While we strive to always give you current and accurate information, the numbers depicted on the website are indicative and may differ from the actual numbers in the main report. At Expert Market Research, we aim to bring you the latest insights and trends in the market. Using our analyses and forecasts, stakeholders can understand the market dynamics, navigate challenges, and capitalize on opportunities to make data-driven strategic decisions.*
Get in touch with us today for customized, data-driven solutions tailored to your unique requirements!
The Australia office rental market is assessed to grow at a CAGR of 10.70% between 2024 and 2032.
The regional markets include New South Wales, Victoria, Queensland, Australian Capital Territory, and Western Australia, among others.
The different property types in the market include high-rise commercial buildings, business parks, mixed-use developments and coworking spaces.
The key players in the market are Officespace.com, Anytime Offices Pty Ltd, Jones Lang LaSalle IP, Inc., Christie CoWork Pty Ltd, Servcorp Limited, REA Group Ltd., Instant Offices Limited and Regus Group Companies, among others.
Explore our key highlights of the report and gain a concise overview of key findings, trends, and actionable insights that will empower your strategic decisions.
Report Features | Details |
Base Year | 2023 |
Historical Period | 2018-2023 |
Forecast Period | 2024-2032 |
Scope of the Report |
Historical and Forecast Trends, Industry Drivers and Constraints, Historical and Forecast Market Analysis by Segment:
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Breakup by Property Type |
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Breakup by Region |
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Market Dynamics |
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Price Analysis: |
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Competitive Landscape |
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Companies Covered |
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