Premium office space drives sharp rental surge across Australia’s CBDs
Office rents in Sydney, Melbourne and Brisbane are climbing at their fastest pace since the pandemic as tenants compete for premium CBD space amid tightening supply.
2 min
Australia’s major CBD office markets are recording some of their strongest rental growth since the pandemic, with businesses increasingly prioritising premium office space despite elevated geopolitical and economic uncertainty.
Knight Frank’s Australian Office Indicators Q1 2026 report found net effective rents in Sydney and Melbourne CBDs rose at their fastest annual pace since COVID-19, increasing 10.2 per cent and 6.8 per cent respectively over the 12 months to March.
Brisbane posted the strongest growth nationally, with net effective rents climbing 11.7 per cent over the same period.
The report points to a widening divide between prime CBD office towers and secondary office stock, as occupiers increasingly focus on quality, location and workplace amenity when making leasing decisions.
Knight Frank Senior Economist, Research & Consulting Alistair Read said demand remained heavily concentrated in premium assets within core CBD precincts, helping drive stronger rental growth in top-tier buildings.
“Occupier demand continues to be heavily concentrated in the most desirable CBD precincts and the highest-quality buildings, accelerating a sharp divergence between core and non-core markets,” Mr Read said.
According to the report, Sydney’s Core precinct and Melbourne’s Eastern Core significantly outperformed broader CBD markets over the past year.
“In Sydney’s Core precinct and Melbourne’s Eastern Core, net effective rents surged 14.3% and 16.1% over the past year, significantly outperforming the rest-of-CBD precincts,” Mr Read said.
The rental gap between prime and non-prime office locations has also continued to widen sharply.
“As a result, core CBD rents are now 54% higher than non-core locations in Sydney and 93% higher in Melbourne, highlighting the growing premium placed on amenity, accessibility and workplace quality,” he said.
Knight Frank said the strong rental growth across the major CBDs was being underpinned by a limited supply pipeline, with few new office developments expected to be delivered in the near term.
Mr Read said subdued construction activity was likely to support ongoing rental growth and tighter vacancy rates over the medium term, particularly for premium office towers.
“The combination of sustained demand and declining levels of new development will aid ongoing prime rental growth and lower vacancy rates over the medium term, particularly for best-in-class assets,” he said.
The report noted that current economic conditions were making new office developments increasingly difficult to justify financially.
“Economic rents remain well above expected market rents, making the construction of new office towers largely unviable, and concentrating tenant demand into existing buildings,” Mr Read said.
While suburban office markets generally remained subdued compared with CBDs, Melbourne’s Southbank precinct was identified as a relative outperformer, recording annual net effective rental growth of 2.7 per cent.
The report comes as broader Asia-Pacific office markets continue to stabilise following several years of disruption linked to hybrid work trends, inflation and rising interest rates.
Knight Frank’s separate Asia-Pacific Q1 2026 Office Highlights report found Sydney and Brisbane were among the strongest-performing office rental markets in the region, behind only Bengaluru and Tokyo for annual prime net face rental growth.
The Asia-Pacific report also found 18 of the 24 cities monitored across the region recorded stable or increasing rents in the first quarter of 2026, even as geopolitical uncertainty intensified following escalating conflict in the Middle East.
For Central Element, the start of work at Pearl represents another step in the company’s growing eastern suburbs pipeline.
All three vehicles will form part of a broader charitable initiative benefiting Big Brothers Big Sisters of America, the American Red Cross and Starlight Children’s Foundation
Jack Freeman believes the most compelling interiors are not decorated, but collected. The FREEMAN & CO founder creates layered, personal spaces shaped by art, travel and craftsmanship.
4 min
For Jack Freeman, a compelling interior should not look as though it was completed in a single shopping trip.
The founder and designer behind FREEMAN & CO prefers rooms that develop through art, travel, commissioned furniture and objects collected over time. It is an approach that treats the home less as a decorative project and more as an evolving portrait of its owner.
“I am a true believer in collecting versus decorating,” Freeman says.
That distinction underpins the international practice he has built across private residences, hotels, property developments, yachts and private aviation. Its projects stretch from Point Piper, Vaucluse, Circular Quay and Toorak to Mayfair, Bel Air and the Caribbean.
Although the locations and architecture vary considerably, the work is connected by a restrained design language. Natural stone, warm timbers and sculptural furniture establish the foundation, while art, bespoke lighting and individual objects give each interior its identity.
The objective is not to overwhelm a room with obvious symbols of expense. It is to create an environment that feels calm, layered and particular to the people living within it.
“The greatest luxury isn’t about excess,” Freeman says. “It’s about creating an oasis where you come home and feel immediately grounded — effortlessly chic and deeply personal.”
Collecting instead of decorating
Decorating can imply the completion of a room: selecting the required furniture, filling the available walls and producing a coherent finished image.
Collecting is less conclusive.
A collected interior has room to change as its owners travel, discover artists, inherit pieces or reassess how they use their home. Its character comes from the relationship between objects rather than adherence to a single brand or season.
That does not mean placing unrelated pieces together without discipline. The designer must understand scale, proportion, material and provenance well enough to create a dialogue between them.
A contemporary artwork might sit beside a historic piece of furniture. A precisely detailed new interior may be interrupted by an irregular object made by hand. Smooth stone can be balanced by timber, textiles or a patinated metal surface that becomes richer with age.
The tension between those elements is part of the appeal.
For Freeman, art is not an accessory to be added once the furniture plan is complete. It forms part of the architecture and atmosphere of the room from the beginning.
Lighting is considered in the same way. Beyond its practical purpose, a bespoke fitting can operate as a suspended sculpture, changing both the room’s composition and the way its materials are experienced after dark.
A design perspective shaped by travel
International travel plays a significant role in Freeman’s creative process.
Design fairs such as PAD Paris and Salone del Mobile in Milan provide opportunities to encounter emerging designers, established galleries, new materials and collectible furniture away from the filter of social media.
More spontaneous discoveries can prove equally important.
“Sometimes it’s the simple things,” Freeman says. “That piece found on a shopping trip with a client in Paris, stumbling across an artisan’s workshop, or a special memory that forms the narrative of the story.”
Objects selected during travel bring more than visual interest into a home. They carry an association with a place, maker or experience, giving the client a connection that cannot be reproduced by ordering an entire interior from a catalogue.
Freeman’s influences are international, but his projects are not conceived as replicas of Parisian, Milanese or Californian style. Each commission responds to its architecture, setting, natural light and the daily lives of its occupants.
A waterfront Sydney residence demands a different treatment from a Mayfair townhouse. A Caribbean estate shaped by brutalist architecture and reflecting pools calls for another response again.
The designer’s role is to absorb those references without allowing them to overwhelm the individual qualities of the property.
Designing the complete experience
FREEMAN & CO extends beyond conventional interior decoration.
The practice’s stated services include interior design and architecture, project management, property acquisition, development advice, concept design, documentation, furniture and lighting design, procurement and art curation.
That breadth allows the team to become involved before a room’s dimensions and finishes are fixed.
Early participation can be important at the top end of the residential market, where architecture, landscape, interiors, technology and art must operate as one environment. Decisions about ceiling heights, wall dimensions, sightlines and lighting can directly affect where art is installed or how custom furniture is proportioned.
The practice can then carry those decisions through to procurement and final installation, maintaining the design narrative as a project moves between architects, builders, specialist craftspeople, dealers and suppliers.
Its residential portfolio includes a South Coast retreat conceived as an escape from urban life, a Caribbean estate with reflecting pools, an East Coast-inspired Palm Beach residence and a Mayfair townhouse organised around an expressive drawing room.
The studio also says it has worked on highly tailored Sydney residences with values exceeding $100 million, although the private nature of such commissions means individual addresses and clients are not always disclosed.
A home that can keep changing
The risk in creating a perfectly resolved interior is that it can become too static — a composition that looks exceptional in photographs but leaves little room for life.
Freeman sees the home as something that should evolve with its owners.
“I love the evolution of design,” he says. “We are talking about people’s lives, and as they evolve, so too should their private sanctuaries.”
That evolution might involve adding art, reupholstering a significant piece, adapting rooms as a family changes or making space for objects gathered through future travels.
The original design needs to be strong enough to accommodate those layers.
This may be the clearest expression of Freeman’s approach to luxury. It is not simply access to rare stone, collectible furniture or commissioned craftsmanship. It is the creation of a personal environment whose meaning deepens rather than diminishes with time.
Fact box
- Designer: Jack Freeman
- Role: Founder and managing director
- Practice: FREEMAN & CO
- Base: Australia, with international projects
- Project locations named by the practice: Point Piper, Vaucluse, Circular Quay, Toorak, Palm Beach, the NSW South Coast, Mayfair, Bel Air and the Caribbean
- Sectors: Private residences, hotels, residential developments, private aviation and superyachts
- Services: Interior design and architecture, property development, project management, property acquisition, documentation, furniture and lighting design, FF&E procurement, interior dressing and art curation
- Design philosophy: Collected, personal interiors shaped by art, craftsmanship, travel and enduring materials
- Website: free-man.co
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