2026-02-09-莱坊-Sydney_CBD_Office_State_of_the_Market_Q4_2025_2页_775kb

Sydney CBD Office Market Summary - 2025

Core Content Overview

The Sydney CBD office market experienced notable growth and activity in 2025, marked by rising prime net face rents, increased investment volumes, and significant tenant commitments. The market also saw a shift in tenant demand towards premium locations, impacting rental spreads and yields across different precincts.

Key Market Trends

Prime Net Face Rents

• Prime net face rents in Sydney CBD rose by 5.5% in 2025, averaging $1,397/sqm.
• The Core precinct led the growth with an increase of 8.2%, while Midtown saw a 4.8% rise.
• Southern precinct remained relatively flat, with a 0.0% annual change.

Incentives and Effective Rents

• Incentives decreased slightly from 36.1% in Q4 2024 to 35.6% in Q4 2025.
• Despite the reduction in incentives, prime effective rents increased by 7.1%, indicating strong demand and limited supply.

Yield Compression

• Core precinct prime yields tightened by 33bps to 5.7%.
• Midtown yields compressed by 14bps to 6.33%.
• Southern precinct yields remained at 7.42%, reflecting lower demand and higher supply.

Investment Activity

• Total investment volumes in the Sydney CBD office market reached $3.3 billion in 2025.
• The acquisition of Grosvenor Place by GPT and Commonwealth Super Corporation was a standout transaction, highlighting the market's attractiveness to institutional investors.

Tenant Commitments

• Zembi committed to 347 Kent St in the Western precinct, with a $1,045/sqm net face rent and a 48% incentive.
• HWL Ebsworth Lawyers signed a $1,360/sqm net face rent lease at 5 Martin Pl in the Core precinct.
• Snowy Hydro secured a $1,565/sqm (gross) lease at 225 George St in the Core precinct.
• Sedgwick renewed its lease at 35 Clarence St in the Western precinct at $1,175/sqm with a 37% incentive.
• NSW Government committed to 252 Pitt St in the Midtown precinct at $1,255/sqm with a 37% incentive.
• Fin Design & Effects signed a lease at 477 Pitt St in the Southern precinct at $950/sqm with a 40% incentive.

Significant Sales

• 35 Tumbalong Blvd. sold for $360 million, with a $12,973/sqm price.
• 225 George St (50%) was sold for $860 million, with a $20,115/sqm price and a ~6.0% core market yield.
• 75 Elizabeth St was sold for $101.8 million, with a $16,678/sqm price and a 5.4% core market yield.
• 135 King St sold for $631.5 million, with a $19,315/sqm price and a 6.2% core market yield.

Major Developments

• Atlassian Central in the Southern precinct is under construction with 58,000 sqm of NLA and 100% pre-commitment.
• 55 Pitt St in the Core precinct is under construction with 63,000 sqm of NLA and 43% pre-commitment.
• 2 Chifley South in the Core precinct is under construction with 42,000 sqm of NLA and 50% pre-commitment.
• 21,000 sqm of sub-lease space was available in the market.

Contact Information

• Office Leasing: Andrea Roberts, +61 2 9036 6703, andrea.roberts@au.knightfrank.com
• Capital Markets: Michael Kwok, +61 2 9036 6620, michael.kwok@au.knightfrank.com
• Occupier Services: Katherine Moss, +61 2 9036 6647, katherine.moss@au.knightfrank.com
• Valuations & Advisory: James Marks, +61 2 9036 6684, james.marks@au.knightfrank.com
• Research & Consulting: Marco Mascitelli, +61 2 9036 6656, marco.mascitelli@au.knightfrank.com
  Naki Dai, +61 2 9036 6673, naki.dai@au.knightfrank.com