Melbourne leads café leasing opportunities as Sydney and Brisbane tighten – BeanScene

Australia’s CBD office markets are entering a new phase, with elevated vacancy levels and increased landlord competition creating potential opportunities for café operators seeking premium locations in Melbourne, Sydney, and Brisbane.

According to the latest Tenant CS Australian CBD Leasing Office Market Report, Melbourne remains the most tenant-friendly of the three major eastern seaboard cities, with average vacancy rates sitting at 15.0 per cent in Premium buildings, 20.8 per cent in A-Grade stock, and 19.99 per cent in B-Grade assets.

Landlords are continuing to offer significant incentives, averaging 47 per cent in Premium buildings, 48 per cent in A-Grade, and 50 per cent in B-Grade properties. These conditions are helping keep effective rents subdued despite only marginal movements in face rents.

While the report focuses on office real estate, the flow-on implications for hospitality operators are significant. Coffee shops, cafés, and grab-and-go food venues remain heavily reliant on office-worker foot traffic, with location strategies closely tied to the recovery of CBD workforces.

In Melbourne, deep availability and ongoing competition between landlords are creating opportunities for operators that may previously have been priced out of prime city locations.

The report notes that around $2 billion worth of office stock is expected to come to market, while almost 100,000 square metres of government backfill space is due to enter the market across 2027 and 2028.

With incentives remaining high and demand concentrated in amenity-rich locations, café operators looking at expansion could find greater flexibility in lease negotiations than at any time in recent memory.

Sydney tells a different story. The city’s office market remains Australia’s strongest, underpinned by lower vacancy and continued demand for premium workplaces.

Vacancy sits at 7.7 per cent in Premium buildings, compared to 16.0 per cent in A-Grade and 15.8 per cent in B-Grade stock, while incentives average between 35.4 and 38.9 per cent depending on grade.

Premium vacancy remains well below Melbourne levels, supporting stronger office-worker density in key precincts such as Barangaroo, Martin Place, Circular Quay, and the Midtown district.

Meanwhile, Brisbane continues to benefit from tightening availability and rental growth. Premium vacancy sits at just 6.5 per cent, the lowest among the three cities, with A-Grade vacancy at 8.3 per cent. Incentives have also compressed, with Premium buildings averaging 33 per cent and A-Grade assets 33.5 per cent, reflecting stronger tenant demand.

Gross effective rents increased 6.7 per cent year-on-year in Premium buildings and 8.5 per cent in A-Grade properties, highlighting the city’s growing commercial strength.

Major commitments from occupiers including CIMIC, Legal Aid, ConocoPhillips, and Christie System Services reinforce continued confidence in Brisbane’s CBD market.

For café operators, this translates into growing worker populations and sustained demand for coffee and foodservice offerings, particularly around emerging business precincts.

While office attendance patterns have permanently shifted since the pandemic, landlords, employers, and hospitality businesses are adapting to a new normal.

For café operators considering expansion, relocation, or the launch of a second venue, the contrast between Melbourne’s abundant availability, Sydney’s premium demand, and Brisbane’s tightening conditions highlights how location strategy is becoming increasingly city-specific.