Australian Flexible Office Space Report Q1, 2025

Sydney CBD Flex Rate Holds Despite Q1 Supply Surge

Sydney's flexible office market displayed resilience, the average desk rate across the dominant CBD market held steady quarter-over-quarter at $1,000 per desk, unchanged from a year prior.

However, this stability occurred alongside a significant 10% quarterly increase in available CBD space, which reached 30,240 sqm. Despite a short term quarterly rise there is still 11% less office space available in Sydney CBD than this time last year.

Performance varied across Sydney's key submarkets. While the core CBD rate was flat, the premium Barangaroo precinct saw a slight rate softening (-2.5% to $1,267 per desk). North Sydney experienced further decline, with rates falling 4.0% to $522 per desk and space tightening (-3.0%), solidifying its position as a more affordable, and with the Metro live, a well connected alternative to the CBD, albeit still down 15% YoY.

Meanwhile, popular fringe location Surry Hills saw both rates (+2.3% to $675 per desk) and available space (+10%) increase. Parramatta remained stable, with rates flat (+0.1% to $726 per desk) alongside a modest space increase (+3.4%).

Within the CBD, pricing varied by size. Rates for the smallest suites (1-4 desks) were flat ($963 per desk), while 5-15 desk spaces saw minor dips (-2.4% to -3.1%).

Conversely, demand favoured larger setups: 16-25 desk rates rose slightly (+2.8% to $1,016 per desk), and 26-50 desk rates jumped significantly (+12% to $861 per desk), even as availability grew across most segments under 50 desks.

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Source: Rubberdesk April 2025

Melbourne Flex Market Steady in Q1: Desk Rates Hold

Melbourne's vast and diverse flexible office market showed relative stability in Q1 2025.

Greater Melbourne saw average desk rates nudge up marginally by 0.6% quarter-over-quarter to $704 per desk, although this remains 6.5% below levels seen a year ago. Available space also saw a slight quarterly increase (+0.5% to 37,495 sqm), continuing a trend of expansion (+16% YoY).

The dominant Melbourne CBD market experienced a slight softening, with average rates declining 3.3% to $729 per desk as available space increased by 4.4%. Key city fringe locations popular with creative and tech industries showed mixed results. Richmond saw rates dip slightly (-1.3% to $790 per desk) while space grew (+15%). Conversely, Cremorne recorded a strong rate increase (+11% to $626 per desk) despite a significant space reduction (-20%). South Melbourne rates remained stable ($625 per desk) with a slight space decrease (-4.3%), while Collingwood also saw flat rates ($542 per desk) as supply tightened (-15%). 

Pricing trends varied by office size. The smallest suites (1-4 desks) saw rates rise modestly (+2.3% to $704 per desk), while rates for the 5-10 desk segment (190 listings) were flat ($700 per desk). Larger suites faced headwinds: 16-25 desk rates fell 5.3% to $792 per desk despite a large 26% space increase, and 26-50 desk rates dropped 7.0% to $650 per desk.

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Source: Rubberdesk Q1 2025

Brisbane Flex Market Taps Brakes While Supply Dips Slightly

Brisbane's fast-growing flexible office market showed consolidation in Q1 2025. Following three quarters of expansion, overall available space dipped marginally (-1.9% to 13,860 sqm), although there is significantly more space than a year ago (+47%).

Average desk rates across Greater Brisbane were stable at $600 per desk. The dominant CBD market, however, saw rates nudge higher (+1.3% to $628 per desk) as available space tightened (-4.5%), reflecting firm demand underpinned by the city's strong economic and population growth.

Beyond the CBD, key hubs showed varied results. Fortitude Valley rates remained flat ($505 per desk) with a slight space increase (+2.6%). Bowen Hills experienced growth, with rates climbing 5.1% to $679 per desk alongside a significant inventory rise (+29%). While lower rates exist in areas like Milton and South Brisbane, options are scarce and typically limited to smaller configurations (<10 desks). 

Market activity centred on smaller requirements. Rates for the most common suite sizes (1-4 desks and 5-10 desks) held steady around $600 per desk. Space availability shifted slightly, increasing for 1-4 desks while decreasing for 5-10 desks. Strong demand was evident for mid-sized spaces (16-25 desks), where rates jumped 12% to $677 per desk despite a 6.2% reduction in available space.

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Source: Rubberdesk April 2025

Perth Rates Hold Firm Despite 15% Q1 Supply Surge

Perth's flexible office market demonstrated stability in Q1 2025. Average desk rates held firm at $700 per desk for the second consecutive quarter, absorbing a continued surge in supply.

Available space rose 15% QoQ to 7,030 sqm – the fourth straight quarterly increase and up 62% year-over-year. This dynamic indicates that solid underlying demand is meeting new inventory, preventing overall rate decline but limiting significant price growth.

The market remains highly centralized, with 78% of supply located in the CBD. CBD inventory swelled by 20%, yet average rates nudged higher (+0.1% to $750 per desk), highlighting strong core demand. Nearby West Perth offered stable value at $399 per desk (though down significantly YoY). Options outside these core business districts remain scarce, reinforcing the market's central focus.

Primarily serving smaller requirements (78% of listings are for <10 desks), Perth saw diverging pricing trends by size this quarter. While the smallest suites (1-4 desks) saw rates dip slightly (-3.4% to $700 per desk), medium-sized spaces gained traction: 5-10 desks (+0.5% to $653 per desk), 11-15 desks (+6.7% to $800 per desk), and 16-25 desks (+4.7% to $649 per desk). This suggests healthy demand for mid-range flexible solutions despite substantial increases in their availability. 

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Source: Rubberdesk April 2025

Adelaide Rates Up to $484 per Desk Despite New Supply

Adelaide's flexible office market landscape transformed in Q1 2025 with a significant supply injection ending 1.5 years of limited availability. Driven by new inventory from operators like Tank Stream Labs and the Innovation Factory, available space surged 48% quarter-over-quarter to 3,600 sqm.

Despite this influx, the median market desk rate increased to $484 per desk, up 5% from Q4 2024 but remaining down 19% year-over-year. This suggests the market absorbed the much-needed supply without immediate upward price pressure.

Centralization remains key, with 72% of inventory in the CBD, which saw a 96% quarterly space increase. Despite this growth, CBD rates only dipped slightly (-0.8% to $595 per desk). For tenants seeking alternatives in the "20-minute city," suburban locations like Wayville ($398 per desk), Dulwich ($798 per desk), and Mawson Lakes ($398 per desk) offer stable, albeit limited, options outside the city core.

Reflecting its focus on smaller businesses, 89% of Adelaide's flex listings cater to small teams (under 10 desks). While the smallest suites (1-4 desks) saw rates edge up (+0.9% to $438 per desk), larger requirements faced downward price pressure from the new supply. Rates for 5-10 desk spaces fell 11% (to $536 per desk), and 16-25 desk suites dropped 17% (to $600 per desk), alongside considerable growth in available space for these sizes (+26% and +853% respectively).

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.

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Source: Rubberdesk April 2025

Canberra Flex Market Stable in Q1, Despite Decline in CBD

Canberra's flexible office market saw a turning point in Q1 2025. Available supply increased slightly by 2.3% to 4,610 sqm, reversing a trend of five consecutive quarterly contractions after nearly two years.

Despite this modest expansion in inventory, the overall market desk rate held steady at $500 per desk compared to the previous quarter. This stability comes even as overall rates remain down 7.4% compared to the same period last year, suggesting the market may be finding a new equilibrium.

The market continues to predominantly cater to smaller offices, with 86% of available office listings designed for teams of 10 people or fewer. Desk rates remained stable quarter-over-quarter for these smaller spaces (1-4 and 5-10 desks at $500 per desk, 11-15 at $575 per desk, 16-25 at $600 per desk). However, space for larger teams of 26-50 people experienced a significant rate decrease of 13% to $500 per desk, coinciding with a 9.1% increase in available space in this category, indicating specific softening for larger requirements.

While 42% of Canberra's flex inventory is located in the CBD, this central area saw an 8.4% decrease in average desk rates to $577 per desk quarter-over-quarter. In contrast, key suburban markets maintained stable pricing, offering strong alternatives. Locations such as Belconnen ($540 per desk), Kingston ($540 per desk), and Dickson ($500 per desk) provide great options with steady rates. Notably, Belconnen also saw a 9.6% increase in available space this quarter, further broadening choices outside the city core.

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.

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Source: Rubberdesk April 2025