Investment Rating - The report indicates a favorable outlook for the Melbourne CBD office market, with expectations of future rental growth supported by a contraction in development [1]. Core Insights - Melbourne recorded its highest annual net absorption since 2018, with a total of +29,475 sqm in 2025, marking the first positive annual result since 2020 [3][25]. - The vacancy rate in Melbourne's CBD rose to 19.0%, primarily due to the completion of several largely vacant refurbished assets [6][36]. - Prime net face rents increased by 5.2% in 2025, the highest growth in three years, with significant increases in the Eastern Core [11][48]. Demand - Tenant demand accelerated in 2025, with net absorption reaching +29,475 sqm, driven by a flight-to-quality trend where prime net absorption totaled +40,070 sqm [25][28]. - The Professional Services sector was the most active in leasing, accounting for 31% of total deal volume [28]. - Robust lease requirement volumes were noted, with 210 CBD lease briefs released, totaling over 300,000 sqm of active requirements [27]. Supply - The CBD vacancy rate increased due to the reintroduction of major refurbished assets, with the Eastern Core experiencing a rise in vacancy to 18.0% [36]. - Development is expected to slow markedly in 2027, with only two major developments forecasted beyond 2026, leading to a projected fall in supply and upward pressure on vacancy [38]. Rental Growth - Prime net face rents in Melbourne's CBD rose by 5.2% in 2025, with the Eastern Core seeing a 10.4% increase [11][48]. - Despite growth in other precincts, a significant pricing gap remains between the Eastern Core and the broader market, with rents averaging $1,010/sqm in the East compared to $503–$747/sqm in other areas [48]. Investment Market - Investment volumes increased by 33% in 2025, supported by major CBD transactions, with prime yields averaging 6.8% [56]. - The report highlights that as yields stabilize, transaction volumes are expected to continue to rise [56]. Southbank Update - Prime net face rents in Southbank averaged $692/sqm, remaining flat quarter-on-quarter but increasing 2.5% year-on-year [64]. - Southbank recorded a total vacancy rate of 15.0%, outperforming most Melbourne CBD precincts [65].

March Canada dollar (D6H26) futures present a selling opportunity on more price weakness. See on the daily bar chart for the March Canadian dollar futures that prices this week hit a four-week low and are also trending down. See, too, at the bottom of the chart that the moving average convergence divergence (MACD) indicator is also in a bearish posture at the blue MACD line is below the red trigger line and both lines are trending down. Bears have the near-term technical advantage. More News from Barcha ...