Sydney

After some softer years of demand for corporate occupiers in Syndey we are seeing renewed positivity and activity entering the market. More firms are raising their expectations of working from the office and greater overall business confidence is seeing demand for new space rising. However, the post-pandemic backlog in the supply of new office space, particularly Grade-A, means there is likely to be a shortfall until new stock comes onto the market in the 2030s.

As with other major corporate hubs, fit outs in Sydney are currently focused on providing greater quality and amenities to attract people back to the office and retain talent.

One consequence of this is that despite the shortage of new Grade-A space, we are not seeing a flight to second-tier spaces. Instead, occupiers are choosing to stay put, negotiate with landlords, and either wait for the new sites to come available, or investing to upgrade existing space to meet contemporary requirements.

Collectively, this high demand for upgraded or new top-tier fit-out is reflected in Sydney’s high costs – and the city ranks highly as a high-specification fit out market at A$7,221 per m2. Unusually for markets at the upper end of our ranking, Sydney’s low-specification fit-out costs are much lower at A$3,357 per m2, suggesting that there remains a healthy market for more entry-level fit-out projects despite the flight to quality at the top end.