5 hotspots picked for office investment in 2026: Knight Frank

North Sydney

Sentiment has been weighed down by high overall vacancy, but this disguises a very different picture at the top end of the market, where newly completed assets are outperforming the wider market by a substantial margin. The addition of the Sydney Metro has reinforced the primacy of North Sydney within the suburban office landscape, while the current yield spread makes a compelling argument for North Sydney as a relative value play.

Cremorne, Melbourne

Cremorne continues to outperform other Melbourne metropolitan office locations due to its proximity to premium amenities, high-quality hospitality venues, the MCG, the Rod Laver arena and key transport links. Rent performance continues to outstrip the CBD, and the recent correction in asset values offers an opportunity for investors to get in ahead of the next wave of growth.

Brisbane CBD Top Tier

Premium vacancy sat at a super-tight 3.8% in mid-2025, and with two new major additions effectively fully committed prior to completion, top-tier CBD buildings will continue to outperform in 2026. While backfill space has been created by the new supply, availability in premium and high-A buildings has seen quick take-up. The difference between the top 10 to 15 buildings and generic A grade space will widen over 2026.

Adelaide & Perth CBDs

Often overlooked by investors focussed on the major East Coast centres, Adelaide and Perth have quietly shifted back to growth. Perth is about to enter a prolonged supply drought, with no major schemes expected to be delivered for at least three years, which will drive up rents. Adelaide, meanwhile, offers a relative value play with low transaction costs, and prime yields are already trending down as private investors compete to enter the market ahead of the anticipated recovery.

Knight Frank Chief Economist Ben Burston said the recovery in the commercial market – and specifically the office market – was expected to widen beyond core markets this year, creating greater opportunities for investors.

“However, there will still be divergence in performance and not all assets will benefit from improving conditions in the near term,” he said.

“The question then is how to identify the right assets. One path to addressing this question is via a granular analysis of vacancy to distinguish between the degree of leasing risk in different locations and for different asset types.

“There is no silver bullet, but understanding the locational and asset dynamics are key to reducing risk and identifying assets with the best prospects of growth.”