Australian Flexible Office Space Report Q3, 2024
The Rubberdesk Flexible Office Space Report examines actual flex office availability and pricing as well as trends in Australia.
With changing trends in in the Australian workplace, our report covers flexible office availability and pricing across key markets in Australia.
The flexible office market is experiencing a clear split between small and large office configurations. While operators are successfully maintaining or increasing rates for smaller suites under 15 desks, the larger enterprise spaces are facing increased pricing pressure, likely due to competition from traditional landlords offering fitted suites. This is evidenced by rate declines of 10-21% for larger office configurations across major markets, while smaller office rates have remained resilient or even grown, particularly in premium locations.
Jim Groves, CEO
Australian Flex Office Market Shows Signs of Stabilization Amid Mixed Regional Performance
In the face of economic headwinds and a cautious business environment we observed a mean reversion in the 3 month rolling average desk rate and vacant office space. While the Median cost of an office is up 1.2% quarter on quarter, it is actually showing signs of stabilising around the $667 mark.
"The flexible office sector has responded proactively to competition" said Jim Groves, CEO and Cofounder at Rubberdesk. "We see operators bring compelling offers, including access to third spaces, rent-free periods and space for extra team members to attract and retain tenants in this competitive environment."
Regional Flex Market Performance:
Sydney Resilience: CBD desk rates rose 7% to AUD$1,000, while premium locations like Barangaroo command rates of AUD$1,301 per desk
Melbourne Adjustment: Rates declined 2.4% to AUD$725 amid market-wide vacancy pressures
Brisbane Evolution: Supply expanded 7% to 12,420 sqm, and demand for space remains healthy.
Perth Declines: Western Australia's largest market showed signs of softening with a 7.3% decline in rates alongside a 12.4% surge in inventory.
"Unlike the UK market, where traditional landlords are increasingly embracing flexible managed service agreements, Australian property owners maintain a more conservative stance," noted Jim. "This represents both a challenge and opportunity for the sector's evolution in the Australian market."
Rates for smaller offices for less than 5 people continued to move higher with prices hitting $665 per desk, reflecting operators' ongoing strategy to reconfigure larger spaces into smaller units to match market demand. However, desk rates for larger team spaces of 50 or more retreated, falling 1% to $724 per desk.
Current Flex Trends:
Surge Capacity Seating: Businesses can reduce costs by renting office space based on typical daily attendance rather than maintaining empty desks for remote employees. When extra team members come to the office, they can access designated overflow workspaces.
Day Office Access: Businesses still predominantly working from home get to bring the team together in a day office once a week.
Competition from Landlords: Fully fitted offices in the sub 500 sqm range appeal to tenants, although few offer all inclusive pricing and twelve month terms.
Landlord / Flex Partnerships: Landlords are just starting to work with Flex operators on revenue sharing leases to bring flex into more buildings and provide more options to tenants.
Rent Free Periods: As we move into the holiday season, operators are offerring great incentives in the form of rent free periods and early access.
Key Market Insights:
- Operators are balancing promotional strategies with operational sustainability;
- High fit-out costs and extended lead times continue to constrain new flexible space openings;
- Traditional landlords have remained hesitant to adopt flexible models despite their popularity in the UK;
- Suburban markets show varied performance, with premium locations maintaining stronger rates.
"The current market presents a unique opportunity for businesses to secure favorable terms," added Anna Mears, Flex Space Specialist. "While operators navigate these challenges, tenants benefit from unprecedented choice and flexibility in workspace solutions."
Looking Ahead:
The sector's focus remains on occupancy optimization and strategic growth, with operators carefully evaluating expansion opportunities against market conditions. The success of current incentive strategies and their impact on occupancy rates will likely influence market dynamics heading into the new year.
Source: Rubberdesk October 2024
Sydney Desk Rates Lead the Nation at $1,000 per Desk
As flexible office inventory contracted 3% to 33,810 sqm in Q3 across Australia's largest market, desk rates in Sydney surged 7% to $1,000 per desk. The overall price increase was primarily driven by a 10% rise in rates for offices accommodating 1-15 staff, reflecting strong demand in this segment. Notably, while inventory for smaller offices grew by 1.5%, spaces with 16 or more desks saw a 6% decline in supply, highlighting a shift in market dynamics.
Beyond the Sydney CBD suburban markets showed markedly different trajectories. Surry Hills emerged as the standout performer with desk rates soaring 22.3% to $917 per desk amid a 7.6% reduction in inventory while rates in Manly and Parramatta increased 9% and 5% to $600 and $700 per desk respectively. While premium location Barangaroo maintained its position as Sydney's most expensive suburb at $1,301 per desk as inventory tightened by 7.9%
In contrast, North Sydney experienced a 4.2% decrease in rates to $550 per desk alongside a 12.6% reduction in inventory, positioning it as the most affordable option in greater Sydney for businesses seeking proximity to the CBD.
What's New: Liberty Flexible Workspaces will open a 6-floor, 2000 sqm North Sydney location in Dexus’s 56 Berry Street in August a 1300 sqm facility at 558 Pacific Highway in St Leonards in November.
Start your search for office space in Sydney today.
Source: Rubberdesk September 2024
Melbourne Bucks National Trends as Small Office Rates Fall
With vacancy rates across Melbourne's commercial real estate sector approaching 20%, flexible office space continued its pricing reset in Q3. Desk rates fell 2.4% quarter-over-quarter to $725 per desk, now sitting 7% below their Q1 peak, despite a 4.7% reduction in overall supply.
The market showed distinct segmentation in pricing trends, notably diverging from Sydney's patterns. While Sydney saw rates climb for smaller offices of 1-15 staff, Melbourne's equivalent segment experienced a 6% decline amid a modest 2% drop in inventory. Similarly, mid-sized spaces for 16-50 person teams in Melbourne rose 8% to $800 per desk, contrasting with Sydney's downward trend in this segment. The enterprise segment experienced the sharpest adjustment, with rates for offices accommodating 50 or more staff falling 10% to $665 per desk, accompanied by an 11% contraction in inventory.
In suburban markets, Richmond maintained its position as Melbourne's premium flexible office location at $800 per desk, despite a 6% rate decline. Docklands and Cremorne, while still commanding above-CBD rates, saw modest decreases of 2.5% and 2.4% to $780 and $747 per desk respectively. The most significant suburban adjustments occurred in Collingwood, where rates dropped 25% to $600 per desk, and South Melbourne, which experienced a 17% decline to $625 per desk amid a 6% expansion in inventory to 2,460 sqm.
What's New: Tank Stream Labs is expanding their successful office space portfolio and will be opening the doors to a new premium office at 440 Collins Street in August.
Search for office space in Melbourne.
Source: Rubberdesk September 2024
Prices Remain Flat in Brisbane as Supply Rises 7%
After a sharp contraction in Q1 due to operator closures, Brisbane's flexible office market continued its recovery with inventory expanding for a second consecutive quarter, rising 7% to 12,420 sqm. The CBD led this expansion with a 19% increase in supply to 8,770 sqm, accompanied by a 3.8% rise in desk rates to $619.
Market dynamics varied significantly across office sizes. While rates for smaller offices of less than 10 staff held steady at $600 per desk, mid-sized spaces accommodating 10-26 staff saw rates climb 13% to $680 per desk, driven by a substantial 20% reduction in supply. The enterprise segment, despite limited availability, experienced a 13% rate decline to $502 per desk, offering value opportunities for larger teams.
Across Greater Brisbane's submarkets, Fortitude Valley recorded modest growth with rates increasing 1% to $505 per desk amid an 11% expansion in supply. East Brisbane and South Brisbane emerged as premium locations, commanding rates above $750 per desk, though inventory remains primarily confined to smaller office configurations.
What's New: Liberty Flexible Workspaces will open a 1500 sqm location in Brisbane CBD at 127 Creek Street in October.
Find the perfect office for your team in Brisbane.
Source: Rubberdesk September 2024
Rates Drop 7% in Perth as Supply Rises 13%
After maintaining stability above $700 per desk for over 18 months, Greater Perth's flexible office market experienced its first significant adjustment, with rates declining 7.3% amid a 12.4% expansion in inventory.
The market's downturn was notably pronounced in key business districts. The CBD saw rates fall 7% to $700 per desk, while West Perth experienced a dramatic 34% decrease to $399 per desk, creating compelling value opportunities near Saint Georges Terrace.
Perth's market structure remains distinct from other major Australian cities, with 82% of available offices configured for teams of 10 or fewer staff. While rates for these smaller offices remained stable, larger spaces accommodating 16-25 staff saw prices decline 21% to $594 per desk, breaking the $600 barrier for the first time. Options beyond the CBD remain limited, particularly for larger teams, reflecting Perth's concentrated flexible office market.
What's New: Liberty Flexible Workspaces will open a 1700 sqm facility across two floors in the Westralia Square 2 building at 141 St Georges Terrace from August.
Start your search for office space in Perth today.
Source: Rubberdesk September 2024
Adelaide Rates Hold at $600 per Desk Despite Fall in Supply
Adelaide's flexible office market demonstrated stability for a third consecutive quarter, maintaining rates at $600 per desk despite a 20% contraction in inventory.
The market remains highly centralized, with 80% of flexible office space concentrated in the CBD. While suburban locations such as Dulwich, Eastwood, and Mawson Lakes offer limited alternatives, their inventory remains minimal.
Characteristic of a boutique market, Adelaide's flexible office landscape is predominantly configured for smaller occupiers, with 93% of spaces designed for teams of fewer than 10 staff.
Despite its compact size, the city sustains a vibrant independent coworking ecosystem, supported by local operators like Spot Coworking, Business Hub, Servcorp, Regus, and Hub Australia.
What's New: IWG's Spaces is set to open a much needed new serviced office in Mawson Lakes in February 2024.
Search for office space in Adelaide.
Source: Rubberdesk September 2024
Canberra Supply Shrinks for Fourth Straight Quarter
Canberra's flexible office market continued its supply contraction for a fourth consecutive quarter, falling to 4,205 sqm, marking a 21% reduction over the past year. Despite this sustained tightening in inventory, desk rates across the market remained stable at $540 per desk.
Though the Central Business District (CBD) in Canberra provides the most choice it comes at a premium of $730 per desk. Compare this to Symonston and Dickson which continue to provide both value and options at median rate of $450 and $400 per desk respectively.
In suburban markets, Dickson emerged as an exception to the broader pricing stability, recording a 25% increase in desk rates to $500 per desk. Other suburban locations maintained steady rates, continuing to offer cost-effective alternatives to central locations for small teams seeking flexible space.
Despite being a smaller market, Canberra offers a reasonable selection of 17 operators to choose from, including well-known names such as Work Club Global, Hub Australia, Wotso and Servcorp.
Search for the perfect office in Canberra.
Source: Rubberdesk September 2024
Select a city: Sydney | Melbourne | Brisbane | Perth | Adelaide | Canberra
Author: Tom Petryshen, VP Growth & Analytics
Methodology
- All prices presented in this report are based on the median rate for a location or office size across an entire month
- Availability is based on the inventory inside the Rubberdesk platform and includes coworking desks and available offices that hosts share with Rubberdesk
- Actual Flex office availability may be higher as not all hosts share 100% of their unoccupied office space with Rubberdesk
About Rubberdesk
Rubberdesk is Australia’s flexible office marketplace with thousands of fully furnished serviced offices and coworking desks ready for you to move in and rent by the month or year. Our proprietary platform combined with industry insights from our office specialists helps you find the best office for your needs.
With a view across all available options, we simplify the process to create a bespoke shortlist, arrange tours and negotiate the best deals. All for free and without obligation.
As well as being the proud partner of Cadigal Rubberdesk provides Flex Powered by Rubberdesk for commercial agents across Australia.
Rubberdesk also operates in the UK and Ireland.
Media Information
For further information, images, and interview requests, please contact Jim Groves at Rubberdesk:
- E: [email protected]
- T: 1300433757
