Rents for office space in Sydney and Melbourne are set to rise by 23 percent each over the next three years as rising demand is met by a dearth of new supply, according to the latest forecast.

In its latest forecasts, real-estate services firm CBRE said prime net effective rents for office stock would rise from an estimated $705 per square meter in December 2016 to $870 per square meter in December 2019. Over the same period, prime net effective rents in Melbourne are expected to increase…