> **来源：[研报客](https://pc.yanbaoke.cn)** # Melbourne CBD Office Market Report with Southbank update February 2026 Demand across Melbourne's CBD office market remains resilient, supported by strong net absorption. Vacancy is likely to rise further in the short-term as new supply completes, but fundamentals remain favourable. A significant contraction in development is expected to underpin future rental growth. knightfrank.com.au/research # Key Insights Melbourne recorded its highest annual net absorption since 2018. However, vacancy rose over the same period due to the completion of several largely vacant refurbished assets. Laurence Panozzo Research & Consul # 19.0% # Latest vacancy - CBD Melbourne's CBD vacancy rate rose $1.1\%$ over H2-2025 to $19.0\%$ . The rise in vacancy was mainly due to the addition of several mostly vacant refurbishments such as 111 Bourke St and 800 Collins St. # 6.8% # Yield Q4'25 - prime basket Prime yields in Melbourne's CBD softened 3 bps q/q to $6.76\%$ whilst secondary yields softened 15 bps to $7.82\%$ . The spread between prime and secondary yields, 107 bps, is at a 10-year high. # 29k # 12-month net absorption Net absorption in Melbourne reached its highest annual total since 2018. Net absorption for prime stock totalled 40,070 sqm over 2025, while secondary totalled -10,595 sqm; supporting the bifurcation theme in the market. # 5.2% # Prime rental growth Prime net face rents were up $5.2\%$ in 2025, their highest increase in 3-years. Most of the growth was concentrated in the Eastern Core where net face rents rose $10.4\%$ . # 100k # Sqm net additions in 2025 Net additions reached a 4-year high in 2025 with 4 new refurbishments and 2 developments reaching completion. Supply is forecast to be equally strong in 2026 with several developments reaching completion. # 47.6% # Prime incentives Prime incentives continue their gradual fall, down $0.2\%$ q/q to average $47.6\%$ . Incentives range between 47.0- $53.5\%$ across all the precincts except the Eastern Core where they average $40.0\%$ . Melbourne CBD Office Market Indicators – February 2026 <table><tr><td>Grade</td><td>Total Stock sqm</td><td>Vacancy Rate %</td><td>Annual Net Absorption sqm</td><td>Annual Net Additions sqm</td><td>Average Net Face Rent $/sqm</td><td>Average Incentive %</td><td>Net Effective Rent Growth % q/q</td><td>Core Market Yield %*</td></tr><tr><td>Prime</td><td>3,854,040</td><td>19.1</td><td>40,070</td><td>102,727</td><td>756</td><td>47.6</td><td>0.1</td><td>6.8</td></tr><tr><td>Secondary</td><td>1,425,182</td><td>18.5</td><td>-10,595</td><td>-2,609</td><td>565</td><td>48.3</td><td>0.6</td><td>7.8</td></tr><tr><td>Total</td><td>5,279,222</td><td>19.0</td><td>29,475</td><td>100,118</td><td></td><td></td><td></td><td></td></tr></table> Source: Knight Frank Research/PCA * assuming WALE 5 years # Melbourne economy # TRANSPORT AND EVENTS STRENGTHEN CBD APPEAL In late 2025, Melbourne completed the Metro Tunnel, a transformative infrastructure project that is reshaping how commuters travel to the CBD. More than 70,000 passengers used the network on its first official day, highlighting its immediate impact. Over the longer term, the project is expected to reduce congestion across the City Loop and accelerate access into the CBD. The newly delivered Town Hall Station provides direct access to the east end of Collins St. for the first time, significantly enhancing connectivity to the rail network. These improvements are expected to increase workforce accessibility and support a recovery in footfall. Beyond major transport upgrades, large-scale events continue to enhance the vitality and appeal of the CBD. The 2026 Australian Open attracted 1.3 million attendees over three weeks and supported approximately 16,000 jobs. Global events of this scale, alongside the F1 Grand Prix, reinforce Melbourne's international profile and enhance its international appeal, generating substantial economic benefits which are expected to flow through to office market performance. # FUNDAMENTALS IN VICTORIA ARE STILL STRONG Despite stronger percentage population growth in Queensland and Western Australia, Victoria continues to attract the largest number of new residents nationally. Year to June 2025, Victoria recorded net population growth of 123,507 people, with net interstate migration remaining broadly flat. GDP growth is forecast to strengthen in 2026 to $2.0\%$ , up from $1.8\%$ in 2025, and is expected to accelerate further to $3.0\%$ in 2027. Townhall Station – Opened December 2025 Source: Knight Frank Research, ABC Australian Open - January 2026 Source: Knight Frank Research, Channel 9 Components of annual population growth by state, 000's people Source: Knight Frank Research, ABS Victoria GSP growth forecast % change y/y Source: Knight Frank Research, Oxford Economics # TENANT DEMAND ACCELERATES IN 2025 Net absorption across Melbourne's CBD reached its highest level since 2018, with $+29,475$ sqm recorded in 2025. This also marked the first positive annual result since 2020, signalling a clear improvement in market conditions. The flight-to-quality trend persists with prime net absorption totalling $+40,070$ sqm, while secondary space recorded a net loss of $-10,595$ sqm. Most CBD precincts recorded increased absorption in H2 2025. Docklands led the market, with occupied space rising by 32,485 sqm, driven by several tenants expanding and others relocating from Metro and City Fringe locations. More than half of the Eastern Core's $+16,389$ sqm gain was attributable to Corrs Chambers' relocation from the Spencer precinct to approximately 9,000 sqm of high-rise space at 120 Collins St. # ROBUST LEASE REQUIREMENT VOLUMES In 2025, 210 CBD lease briefs were released to the market at an average size of 1,535 sqm, totalling more than 300,000 sqm of active requirements. With most occupiers yet to finalise their accommodation decisions, leasing volumes are expected to strengthen in 2026 compared to 2025. Professional Services was the most active industry in Melbourne's CBD leasing market in 2025, accounting for $31\%$ of total deal volume, followed by Finance and Insurance at $25\%$ . Together, these sectors represented half of all space leased. Other prominent sectors included Retail, Logistics, Education, and Construction. Melbourne CBD lease briefs by no. of briefs (LHS), and average size in sqm (RHS) Melbourne CBD annual net absorption by grade, 000's sqm Melbourne CBD office net absorption by precinct and direction, 000's sqm; 6-months to H2-2025 # Share of take-up by industry total sqm leased by industry in Melbourne CBD, % # LATE-YEAR SUPPLY PUSHES VACANCY HIGHER Melbourne's CBD vacancy rate increased across most precincts and grades in H2-2025, driven by the reintroduction of major refurbished assets with elevated vacancy, such as 111 Bourke St and 800 Collins St. Flagstaff remains the most challenged precinct in terms of vacancy followed by Spencer and the Docklands. Precincts east of Swanston St continue to record the lowest vacancy rates in the CBD. However, the Eastern Core vacancy rose $5.7\%$ to $18.0\%$ following the re-inclusion of 111 Bourke St, which is expected to remain completely vacant until EY relocates in late 2026. Premium vacancy declined $0.8\%$ over H2-2025 to $15.8\%$ , remaining well below A-Grade and B-Grade vacancy, highlighting the continued bifurcation within the market. # DEVELOPMENT TO SLOW MARKEDLY IN 2027 Three new developments are forecast to complete in 2026, led by 7 Spencer St in Q1-2026, followed by 435 Bourke St and 51 Flinders Ln later in the year. Approximately half of this new space is pre-committed, indicating that a substantial volume of speculative stock will enter the market, which is likely to place further upward pressure on vacancy in the near term. Beyond 2026, only two major developments are forecast to proceed, headlined by 600 Collins St, where early works will commence imminently. Consequently, supply is projected to fall sharply as elevated interest rates, incentives, and construction costs constrain development. This medium-term slowdown in new supply is expected to place downward pressure on vacancy from 2027 onwards, supporting market fundamentals. Melbourne CBD office vacancy rate by grade and precinct, % Melbourne CBD vacancy rate forecast compared to 10-year average, % Melbourne CBD office new supply pipeline by commitment type, sqm Source: Knight Frank Research, PCA # Major office supply Refurbishments (complete) <table><tr><td>#</td><td>Address</td><td>SQM</td><td>Completion</td><td>Developer</td></tr><tr><td>1</td><td>800 Collins St</td><td>28,650</td><td>Complete</td><td>Manulife</td></tr><tr><td>2</td><td>85 Spring St</td><td>10,000</td><td>Complete</td><td>Pellagra</td></tr><tr><td>3</td><td>111 Bourke St</td><td>44,000</td><td>Complete</td><td>Charter Hall & Brookfield</td></tr><tr><td>4</td><td>Swann House</td><td>5,000</td><td>Complete</td><td>Fidinam Group</td></tr></table> New developments (complete) <table><tr><td>#</td><td>Address</td><td>SQM</td><td>Completion</td><td>Developer</td></tr><tr><td>5</td><td>130 Little Collins St</td><td>10,377</td><td>Complete</td><td>Golden Age</td></tr><tr><td>6</td><td>17 Bennett's Ln</td><td>5,000</td><td>Complete</td><td>Pellicano</td></tr></table> Full Refurbishments (under construction) <table><tr><td>#</td><td>Address</td><td>SQM</td><td>Completion</td><td>Developer</td></tr><tr><td>7</td><td>720 Bourke St</td><td>29,000</td><td>H2 2026</td><td>Cbus Property</td></tr><tr><td>8</td><td>800 Bourke St</td><td>35,000</td><td>H2 2027</td><td>GPT Group</td></tr></table> New developments (under construction) <table><tr><td>#</td><td>Address</td><td>SQM</td><td>Completion</td><td>Developer</td></tr><tr><td>9</td><td>7 Spencer St</td><td>42,000</td><td>H2 2025</td><td>Mirvac</td></tr><tr><td>10</td><td>51 Flinders Ln</td><td>29,000</td><td>H2 2026</td><td>GPT Group</td></tr><tr><td>11</td><td>435 Bourke St</td><td>60,000</td><td>H2 2026</td><td>CBUS Property</td></tr><tr><td>12</td><td>State Library Exchange</td><td>10,000</td><td>H1 2027</td><td>Scape</td></tr><tr><td>13</td><td>600 Collins St</td><td>60,000</td><td>H2 2029</td><td>Hines</td></tr></table> DA Approved / Mooted <table><tr><td>#</td><td>Address</td><td>SQM</td><td>Completion</td><td>Developer</td></tr><tr><td>14</td><td>Melbourne Townhall</td><td>17,000</td><td>2028+</td><td>Lendlease</td></tr><tr><td>15</td><td>60 & 52 Collins St</td><td>42,000</td><td>2030+</td><td>Dexus</td></tr><tr><td>16</td><td>555 Collins St (2)</td><td>35,000</td><td>2030+</td><td>Charter Hall & GIC</td></tr><tr><td>17</td><td>Rialto Intercontinental</td><td>20,000</td><td>2030+</td><td>Salta Brothers</td></tr><tr><td>18</td><td>522-552 Flinders Ln</td><td>41,000</td><td>2030+</td><td>Investa</td></tr><tr><td>19</td><td>300 Lonsdale St</td><td>20,000</td><td>2030+</td><td>GPT Group</td></tr></table> # Deals and rents # RENTAL GROWTH ACCELERATES IN 2025 Melbourne's CBD recorded its strongest annual rental growth in three years in 2025, with prime net face rents up $5.2\%$ . Growth was heavily concentrated in the Eastern Core, where rents increased $10.2\%$ . This uplift reflects the unwavering demand for premium-grade office space in the Paris End which is becoming increasingly scarce. Rental growth was present in other precincts but concentrated amongst higher-quality and repositioned assets. Despite uplifts outside the Eastern Core, a substantial gap in pricing remains between that precinct and the broader market. Rents average $1,010/sqm in the East compared to $503–$747/sqm across the remaining six precincts. # TENANTS CONTINUE TO MOVE INTO THE CBD Recent leasing activity continues to highlight increased occupier migration into the CBD from suburban Melbourne, as tenants take advantage of elevated incentives and more favourable market conditions for tenants. Jetstar's relocation from Collingwood to Melbourne Quarter Tower 2, where it will occupy approximately 6,000 sqm from mid 2026, is a notable example. Within the CBD, tenant movement from suburban Melbourne has been concentrated in the Docklands, Spencer, and Western Core precincts, where effective rents remain broadly comparable to firms' previous occupancy costs. Other significant transactions include NAB's 63,000 sqm renewal at 700 Bourke St, AirTrunk's and FM Global's precommitments at 51 Flinders Ln, and APA Group's 4,000 sqm lease at Pembroke's 161 Collins St. Melbourne CBD prime rents net face rent $\mathbb{S} / \mathbb{sqm}$ (LHS), and annual growth $\%$ (RHS) Melbourne CBD prime rents by precinct, net face rent \(/sqm(LHS), and annual growth \((\%)\) Recent significant tenant commitments <table><tr><td>Occupier</td><td>Property</td><td>Precinct</td><td>Type</td><td>Size (sqm)</td><td>Term (years)</td><td>Start Date</td></tr><tr><td>Jetstar</td><td>699 Collins St</td><td>Docklands</td><td>New Lease</td><td>7,000</td><td>10.0</td><td>H2 2026</td></tr><tr><td>FM Global</td><td>51 Flinders Ln</td><td>Eastern Core</td><td>New Lease</td><td>1,900</td><td>10.0</td><td>H1 2027</td></tr><tr><td>AirTrunk</td><td>51 Flinders Ln</td><td>Eastern Core</td><td>New Lease</td><td>1,900</td><td>tbc</td><td>H1 2027</td></tr><tr><td>APA Group</td><td>161 Collins St</td><td>Civic</td><td>New Lease</td><td>4,000</td><td>7.0</td><td>H1 2027</td></tr><tr><td>Insignia</td><td>8 Exhibition St</td><td>Eastern Core</td><td>New Lease</td><td>8,400</td><td>10.0</td><td>H2 2027</td></tr><tr><td>NAB</td><td>700 Bourke St</td><td>Docklands</td><td>Renewal</td><td>63,000</td><td>tbc</td><td>H2 2028</td></tr></table> Source: Knight Frank Research # Investment market # INVESTMENT VOLUMES TREND UPWARDS Investment volumes increased \(33\%\) in 2025, largely supported by several major CBD transactions, including 750 Collins St. \((\\) 383\mathrm{m})\), Flinders Gate \((\\( 225\mathrm{m})\), and 357 Collins St. \((\\) 195\mathrm{m})\). Most capital in these deals was sourced from cross-border institutions and syndicates. Private investors were the next most active buyer group, accounting for \(28\%\) of transaction volumes. REITs and institutions continue to face constraints in Victoria, primarily linked to taxes, which have dampened sentiment. Prime yields average \(6.8\%\), having softened 24 bps y/y, while secondary yields have softened by 36 bps over the same period. Ongoing yield adjustments in Melbourne's CBD has weighed on investment activity. However, as yields approach their peak and stabilise, transaction volumes are expected to continue to pick up. Melbourne CBD office yields by grade $\%$ (LHS), and spread in bps (RHS) Melbourne CBD office investment volumes investment volumes in A$m (LHS), and # transactions (RHS) Share of capital flows by buyer type Melbourne CBD investment volumes $AUD, % Recent significant sales <table><tr><td>Property</td><td>Interest</td><td>Price ($M)*</td><td>CMY (%)</td><td>NLA (sqm)</td><td>$/sqm NLA</td><td>WALE (years)</td><td>Purchaser</td><td>Vendor</td><td>Sale Date</td></tr><tr><td>750 Collins St</td><td>100%</td><td>383.0</td><td>6.5</td><td>41,399</td><td>9,251</td><td>10.0</td><td>Trust Capital</td><td>GPT Group</td><td>Aug-25</td></tr><tr><td>357 Collins St</td><td>100%</td><td>195.3</td><td>c7.3</td><td>31,919</td><td>6,119</td><td>c2.5</td><td>Harry Stamoulis</td><td>Frasers</td><td>Sep-25</td></tr><tr><td>Flinders Gate</td><td>100%</td><td>254.5^</td><td>6.5</td><td>20,400</td><td>12,476</td><td>5.0</td><td>PAG</td><td>Dexus</td><td>Oct-25</td></tr><tr><td>470 Collins St</td><td>100%</td><td>60.4</td><td>6.2</td><td>11,009</td><td>5,482</td><td>1.2</td><td>Fortis</td><td>Suleman Group</td><td>Oct-25</td></tr></table> *Net sale price Includes the sale of an annexed car-park. Source: Knight Frank Research, MSCI # Southbank update # RENTS STABILISE IN SOUTHBANK Prime net face rents in Southbank average \(692/sqm, remaining flat q/q and increasing 2.5% y/y. Growth was notably stronger throughout 2024, with prime rents rising \(8.9\%\), supported by several leasing transactions and a recalibration in rents closer to the CBD. Despite this uplift, prime rents in Southbank remain approximately \(8.5\%\) below the Melbourne CBD average. Incentive levels are aligned with the CBD, averaging \(47.5\%\) for prime assets compared with \(47.6\%\) for the CBD. # RELATIVELY LOWER VACANCY IN SOUTHBANK In terms of vacancy, Southbank is currently outperforming most Melbourne CBD precincts and City Fringe markets, recording the third-lowest total vacancy rate at $15.0\%$ . Southbank also has the lowest sub-lease vacancy of any market within Melbourne's CBD or City Fringe at $0.3\%$ . Prime vacancy has fallen $3.2\%$ since its high 18 months ago to $14.8\%$ , secondary vacancy has fallen $4.8\%$ to $15.4\%$ over the same period. This improvement has been underpinned by limited new supply with only 1 new development delivered over the past 4-years (11 Eastern Rd adding 16,044 sqm). Recent tenant relocations into Southbank from occupiers such as McCain Foods, Energy-Safe and BASF have translated into positive net absorption after five continuous years of declining occupied space. Post-pandemic net absorption in Southbank has now reached its highest level with $+7,434$ sqm in 2025, reinforcing the precinct's improving fundamentals. With no new supply this has also supported the recent fall in vacancy rates. Southbank office vacancy rate by grade, % Southbank rents and incentives by grade, net facerent $/sqm$ (LHS) and incentives $\%$ (RHS) Southbank office net absorption by grade, 000's sqm Melbourne office vacancy rate by precinct / locale and type of vacancy, % We like questions, if you've got one about our research, or would like some property advice, we would love to hear from you. Research & Consulting Laurence Panozzo +61401251876 laurence.panozzo@au.knightfrank.com Research & Consulting Tony McGough +61406928820 tony.mcgough@au.knightfrank.com Capital Markets Trent Preece +61400504300 trent.preece@au.knightfrank.com Occupier Services Jenna Wallace +61456661691 Jenna.@au.knightfrank.com Office Leasing Chas Keogh +6141880111 chas.keogh@au.knightfrank.com Office Leasing Simon Hale +61417147785 simon.hale@au.knightfrank.com Managing Director, VIC Ben Burston +61402441074 dominic.long@au.knightfrank.com Asset Management Services Lisa Atkins +61416090183 lisa.atkins@au.knightfrank.com Valuations & Advisory Michael Schuh +61412443701 michael.schuh@vic.knightfrankval.com.au # Recent Research Leading Indicators 续表 Raaannnnnne aannnnnne aannnnnne aannnnnne Break shackles: the rise of BTR Baaee Australian Industrial Review aaannnnnne aannnnnne aannnnnne Melbourne CBD Office State of the Market Maaeae aee - eaaee rnnnne aannnne nnnnne The Weath Report 202