In Q1 2020, the high pre-commitment rate by well-established large tenants supported rents. With vacancy rates set to rise over the near term, future rental rates will soften, although, at the prime end of the market, any decline is likely to be reflected through increases in incentives rather than in adjustments to face rents.
The significant upward pressure which core CBD office rents have experienced over recent years was anticipated to ease through 2020 as a significant pipeline of new space was added to the city's inventory. The economic impact of COVID-19 will exacerbate the situation with rents to face downward pressure over the year ahead.
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