Melbourne Fringe and Suburban Office Figures Q3 2025

Key Points: 

• Leasing demand was mixed over H1 2025 with Southbank & St Kilda Road recording 6-month absorption of +249sqm and -18,313sqm respectively.
• The office development pipeline remains empty for Southbank and St Kilda Road. We currently forecast elevated withdrawals across St Kilda Road over the short term. Majority of suburban supply remains in a DA Approved status with project delays likely.
• Vacancy declined for all fringe and suburban precincts over the last 12-months, except for the City Fringe and St Kilda Road. Both markets have faced significant centralisation pressures, however we anticipate these pressures to be easing.
• Face rents across the fringe saw normalised face rent growth in Q3 2025. Incentives declined across most metro precincts, as landlords for select high quality assets become more aggressive given current supply dynamics set to emerge.
• Investment activity in Melbourne’s Fringe and Metro markets experienced a moderate uptick in Q3 2025 with just over $100m in fringe and suburban assets transacting. Yields have held stable for the second consecutive quarter, with expectations that Melbourne’s metro office market has reached peak pricing.