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Demand for office space in a post-COVID Australia

COVID-19 has changed the landscape for office landlords in Australia, but while many have moved to a new balance between working from home and in the office, traditional CBD settings are likely to remain crucial for corporations.

Sydney CBD office buildings
The demand profile for CBD office buildings has changed as a result of the pandemic, but is not likely to disappear. Photo: Shutterstock

Before COVID-19, Australia’s domestic office market was in the midst of a decade-long period of expansion. 

Capital values and rental growth reached unprecedented levels. Australia’s two largest markets, Sydney and Melbourne, recorded their lowest vacancy rates in 30 years (5.0 per cent and 3.4 per cent) at the end of 2019.

The medium-term outlook for the market was strong, but as for many industries, COVID-19 served as a circuit breaker.