Adelaide Office Market Dynamics Q2 2026

• Headline vacancy rate recorded at its lowest since Q1 2020.
• Slowing supply pipeline in the Adelaide CBD.
• Prime yields were unchanged on a quarterly and annual basis.

Net absorption totalled 500 sq.m. in Q2 2026, down from 4,500 sq.m. recorded in the previous quarter. On a rolling annual basis, net absorption in the Adelaide CBD reached 21,700 sq.m. Nevertheless, the headline vacancy rate decreased 0.1 percentage points (pps) to 14.5% over the quarter; its lowest level since Q1 2020. The prime grade vacancy rate also decreased 0.9 pps to 13.6%, attributed to expansionary activity by large occupiers (>1,000 sq.m.).

No major developments completed over the quarter. However, there are currently two projects under construction in the supply pipeline, totalling 71,700 sq.m., and two projects with plans approved, totalling 51,000 sq.m. The largest project under construction is Festival Tower 2 - the second commercial tower on the Walker Corporation development site, which comprises 50,000 sq.m. of office space. The building is 38.0% pre-committed and expected to complete in Q4 2028.

Average prime gross face rents increased 0.4% over the quarter and reflected year-on-year growth of 3.6%. Average prime gross effective rents also increased 0.4%, with year-on-year growth of 3.3%. Average prime midpoint yields were unchanged at 7.75% on a quarterly and annual basis. There remains a spread between buyer and vendor expectations amid broader economic uncertainty.

Occupier expansionary activity and centralisation from suburban office geographies is expected to drive net absorption over the near term. However, net absorption is likely to be below the strong levels of the last three years. Investors are likely to remain selective in terms of potential acquisitions amidst broader global economic uncertainty, and prime office yields are forecast to be stable over the short term.