Sydney's office market could be about to undergo its biggest change since 2015, according to latest research from Savills.

Data from the company indicated net face rents in Sydney’s CBD recorded further growth during Q4 2018, increasing by 9 per cent throughout the year after breaking the $1,000 per sqm mark in September.

However, Savills Director for Research and Consultancy, Shrabastee Mallik, said there would be a reprieve for tenants this year in the form of close to 85,000 square metres of net supply hitting the market.

“The last time we had any notable office space hit the Sydney CBD office market, it was 2015, when the construction of the International Towers at Barangaroo was completed," she said.

"For the past three years, Sydney has been subject to withdrawals associated with government infrastructure projects, office, residential and hotel conversions.

"While we believe that 2019 will still largely favour landlords, we will see tenants getting some respite from 2020 onwards."

According to the Department of Employment, strong demand fundamentals in the Sydney CBD office market are expected for the next five years, with employment forecasts equally robust.

Ms Mallik said white-collar employment was set to grow by 12.3 percent in the next five years, meaning there would be growing requirements for the sector.

"We see an ongoing trend in multi-national and global companies setting up operations, particularly as the city is increasingly viewed as Australia’s gateway to Asia," she said.

"The benefits to Sydney’s suburban office markets will become more evident, as rental advantage and complementary infrastructure activity make them a more viable option for occupiers.”

Source: Savills

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