Brisbane office market still adjusting to 1 William Street

The Property Council of Australia’s latest Office Market Report, released today, has underlined the increasing appeal of CBD office space and the flow-on impact of 1 William Street on the Brisbane office market.

Vacancy across the Brisbane CBD increased marginally from 15.3 percent to 15.7 percent over the last six months. With no new additions, and negligible withdrawals from the market over this period, the result is ascribed to a minor drop in tenant demand.

“While we have technically recorded a minor vacancy increase in Brisbane CBD, much of the decrease in demand can be attributed to the ripple effect of 1 William Street on State Government leases,” Property Council Queensland Executive Director, Chris Mountford, said.

The relocation of the Department of Agriculture and Fisheries from Primary Industries House has created an aberration in the figures, with a significant amount of space theoretically vacant at the time of measurement.

“What we are largely seeing is a continuation of recent trends in the CBD, with decreasing vacancy in higher grade stock as tenants seek out newer and more centralised spaces.”

The effect of CBD relocations is being felt in the Brisbane Fringe office market, with vacancy increasing from 12.9 percent to 14.4 percent over the last six months. A drop in demand equating to 28,553sqm of space has been recorded in the Brisbane Fringe market so far in 2017.

“Premium CBD office space is acting like a magnet, particularly for smaller nimble tenants in the Brisbane Fringe who are looking to take advantage of market conditions to secure new premises.”

Vacancy in the Gold Coast office market decreased from 12.2 percent to 11.3 percent over the six months to July, primarily due to 8,867sqm of withdrawals.

For more information or to purchase the July 2017 Office Market Report, click here.

Media contact:  Chris Mountford | E cmountford@propertycouncil.com.au

 

Office Market Report July 2017 Analysis – Brisbane CBD market

Headline comments:                                

  • Brisbane CBD vacancy increased in the six months to July 2017
  • This was due to negative demand
  • The upper grades of space recorded positive demand, while the lower grades recorded negative demand
  • There will be 18,640sqm of space supplied in the second half of 2017 with no other space in the pipeline until 2019

Vacancy analysis:

  • Brisbane CBD’s vacancy rate increased from 15.3 percent to 15.7 percent
  • This was due to -8,299sqm of net absorption
  • 330sqm of space was withdrawn over the period
  • The upper grades of space recorded positive demand, while the lower grades recorded negative demand

Future supply:

  • 18,640sqm of space is due to come online in the second half of 2017
  • No space is in the pipeline for 2018
  • 58,209sqm of space is due to come online from 2019 onwards

Office Market Report July 2017 Analysis – Brisbane Fringe market

Headline comments:

  • The Fringe market’s vacancy increased over the period
  • This was due to negative demand
  • All grades have vacancy above 12 percent
  • All grades of space recorded negative demand and vacancy increases over the period
  • There is no significant supply due to come online until 2018

Vacancy analysis:

  • Brisbane Fringe’s vacancy increased from 12.9 percent to 14.4 percent
  • This was due to -28,553sqm of net absorption
  • 11,764sqm of stock was withdrawn over the period
  • All grades of space have vacancy above 12 percent
  • All grades of space recorded negative demand and vacancy increases over the period

Future supply:

  • 764sqm of space is due to come online in the second half of 2017
  • This will be followed by 36,126sqm in 2018
  • 35,067sqm is in the pipeline from 2019 onwards
  • 40,813sqm is mooted for this market