Australian office markets are entering a defining period and the early movers are already seeing the upside.

New JLL research, The Race to Decarbonise, shows that with corporate sustainability commitments accelerating and emissions reporting now a core business requirement, highly energy efficient buildings are now outperforming the broader market, and demand for all-electric workplaces is building.

Sustainability is now a performance driver

Across Australia’s CBDs, highly efficient assets with 5.5–6-star NABERS ratings deliver 7% higher rents, 5.1% lower vacancy, and 45 basis points lower yields.

All-electric assets are achieving an even greater premium with an average 23% rental premium, 7.8% lower vacancy, and 55 basis points sharper yields than the wider market.

“The market has reached a tipping point,” says Annabel McFarlane, Head of Strategic Research. “ Buildings that meet or exceed tenant expectations for electrification are commanding the best tenants and the strongest returns.”

Limited supply, rising competition

Despite this outperformance, the pool of all-electric buildings remains small. By 2027, Sydney’s all-electric stock will represent just 15% of total inventory, and Melbourne’s only 7%.

With 85% of Sydney, 82% of Melbourne, and 97% of Canberra occupiers now holding net-zero carbon targets, competition for compliant space is set to intensify.

“With so many corporates progressing towards net-zero milestones, the contest for future-ready space will only strengthen,” McFarlane says. “Early movers are not just meeting market expectations - they’re shaping them.”

Electrification as future insurance

Buildings that remain gas-dependent risk obsolescence as tenant preferences, investor mandates, and regulatory pressures converge around decarbonisation.

“Electrification is the bridge between ambition and delivery,” says Connor McCauley, Head of Sustainability. “Early adopters aren’t just reducing emissions - they’re protecting value. As the market shifts, the window for early mover advantage will close.”

A defining moment for landlords

The evidence is clear: sustainability now underpins value creation. Landlords who align capital expenditure with electrification feasibility studies and upcoming lease expiries are positioning themselves for the next cycle of growth.

“We’re entering an era where electrification isn’t aspirational - it’s essential,” McCauley adds. “Those who act decisively today stand to benefit most - financially, reputationally and environmentally.”