An estimated 350,000sqm of new supply will enter Australian CBD office markets in the second half of the year, a new high for a half year period.
The record levels will comprise mostly A-grade buildings, continuing the trend of better quality office stock throughout the CBDs. The markets set to record high levels of supply over the next 18 months - Sydney, Brisbane and Perth - will receive the biggest improvement in stock quality over the medium term outlook.
According to CBRE's latest Office MarketView, the trend of improving accommodation is down to several contributing factors including evolving tenant preferences, productivity gains, environmental considerations and residential conversions.
Stephen McNabb, CBRE's Head of Research, said that due to the rise in incentives, real effective rents are markedly lower than real face rents, which sit at around the same level as in 2000.
"Coupled with the fact that on average the standard of accommodation has improved, this means new tenants haven't been getting this much value for money since 2004," Mr McNabb said.
