04 WHAT HAPPENS NEXT
CUSHMAN & WAKEFIELD | 29
AUSTRALIA'S OCCUPIER MARKET OUTLOOK
RENTAL GROWTH LIKELY TO BECOME MORE BROAD-BASED A narrowing supply pipeline is expected to lift rents, with incentive trends diverging between infill and greenfield markets.
Net effective growth to outpace face rents Prime rental growth by city, 5-year CAGR (2027 to 2031)
Incentives expected to ease from late 2027 National stock-weighted prime incentives*
National prime net face rents are forecast to rise by approximately 4.0% in 2027, representing a pick-up in growth from the levels recorded over the past 12 months. Rental growth is expected to become more broad-based, but the timing will increasingly depend on local availability rather than a uniform tightening in national vacancy. The supply outlook is central to this forecast. Rental growth is expected to be strongest where improving demand meets limited choice of suitable prime space. In contrast, submarkets with a larger pool of speculative availability, including Sydney Outer West and Melbourne South East, are likely to see slower growth and more persistent incentives. In greenfield and pre-lease driven markets, incentives are forecast to remain sticky through 2027 as occupiers absorb recently completed and planned supply. They are expected to decline from 2028 as the pool of available space reduces. The difference in timing means effective rental growth could diverge considerably between submarkets, even where face rent growth is similar. Infill and land-constrained locations are likely to see incentives fall more sharply through 2027, supporting an outperformance of net effective rental growth.
24%
6%
5.4%
5.2%
5.1%
22%
5%
20%
4.0%
4.0%
3.9%
3.9%
4%
3.8%
3.8%
3.6%
18%
16%
3%
14%
2%
12%
1%
10%
8%
0%
2016
2019
2022
2025
2028
2031
Sydney Melbourne Brisbane Adelaide
Perth
Net face
Net effective
Actual
Forecast
*Includes greenfield markets: Sydney Outer West, Melbourne West and South East, Brisbane South, Perth South and Adelaide Outer North. Source: Cushman & Wakefield Research
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