_Cairns Office Market: Refurbishment Driving Record Low Vacancy and Strong Rents

Cairns’ office market is entering 2026 from a position of strength, defined by record-low vacancy, minimal incentives and a clear absence of speculative new supply. While many capital city office markets continue to adjust to elevated vacancy and tenant-led conditions, Cairns is operating within a far more constrained and landlord-favourable environment.

Rather than being driven by development cycles, the market is being shaped by disciplined supply, stable occupier demand, and a targeted program of refurbishment that is lifting the quality of existing stock without expanding overall capacity.

Scarcity of Premium Stock Tightens Leasing Conditions

Vacancy across Cairns’ premium office stock has tightened to historically low levels, with limited availability across well-located, modern buildings. Government, legal and health related occupiers continue to underpin demand, providing a stable tenant base that has helped
insulate the market from broader volatility seen elsewhere.

With few relocation options available, competition for quality space has intensified. This scarcity has shifted negotiating power decisively toward landlords, with incentives for longterm leases typically sitting between 5 and 15 per cent which are levels that are exceptionally low by national standards and increasingly rare across Australian office markets.

The tight vacancy environment has also constrained new supply. Developers now require significant pre-commitments before proceeding with new office projects, and in many cases, those thresholds remain difficult to achieve. As a result, the market continues to rely on
existing assets to meet tenant demand.

Refurbishment as a Targeted Growth Strategy

In the absence of new development, refurbishment has emerged as the primary mechanism for market evolution in Cairns. Rather than broad-based upgrading, investment has been focused on improving efficiency, sustainability and workplace amenity within established
assets.

A clear example is the Cairns Commonwealth Centre, where Sandran Property Group is undertaking a comprehensive repositioning. The Commonwealth Centre is currently being upgraded with a complete refurbishment and to provide A grade office accommodation to the corner building with complete upgrades and new external cladding, bronze architectural elements, improved glazing to enhance energy performance and a fully redesigned lobby featuring premium materials. Enhanced end-of-trip facilities have further aligned the building
with contemporary occupier expectations.

The refurbishment has elevated the building’s appeal without introducing new supply into the market. The Centre’s tenancy profile which includes the Family Law Courts, Fair Work Ombudsman, Australian Electoral Commission and health services, reflects the depth of demand for modernised, well-located accommodation in Cairns.

This targeted approach allows owners to future-proof assets, extend building life cycles and capture rental growth, while reinforcing the structural supply constraints supporting the market.

A Market Moving on Fundamentals, Not Cycles

What sets Cairns apart from many office markets is the absence of speculative development pressure. High construction costs, lengthy approval processes and the challenge of achieving economic rents continue to limit feasibility, ensuring supply discipline remains intact.

As a result, rental growth in Cairns is being driven by genuine competition for space rather than incentive-led deals. With vacancy tight and incentives low, effective rents have continued to strengthen, supporting income durability for landlords and investors alike.

Looking ahead to 2026, the outlook remains stable. Refurbishment activity is expected to continue as owners respond to tenant preferences for higher-quality, more efficient workplaces, while new supply remains limited