Positive signs for Brisbane
CBD office market
The Property Council’s July 2018 Office Market Report reveals positive signs for Brisbane office space, with a welcome decrease in vacancy recorded across the CBD.
Released today, the report shows Brisbane CBD vacancy has fallen from 16.1 per cent in January 2018 to 14.6 per cent in July.
Queensland Executive Director of the Property Council, Chris Mountford, said the results are positive for Brisbane, and reveal a return in market activity.
“The drop in vacancy can largely be attributed to increased tenant demand, although there were also some withdrawals in the lower end of the market,” said Mr Mountford.”
“Significant leasing activity in the first six months of 2018 has led to a strong result for the Brisbane CBD. With several more major EOIs in the market, we are hoping to see the trend continue throughout 2018.
“This year has also seen the return of development activity in the office market, with The Annex, Mid-Town Precinct and 300 George Street all under construction, and recent news that Mirvac will commence a 32-storey commercial tower at 80 Ann Street.
“Tenant demand remains primarily focused on Prime assets, as the ‘flight-to-quality’ continues. While vacancy has decreased over the past six months across all grades in Brisbane’s CBD, B Grade vacancy remains above 20.
“Major refurbishment of assets - such as 310 Ann Street and Mid-Town Precinct- will assist in bringing these vacancy rates down, however with tenants demanding large floorplates, more must be done to enable amalgamation of development sites, along with flexibility in the utilisation of site areas to meet tenant demand.
“While we have seen positive news in Brisbane’s CBD over the first six months of 2018, the fringe has witnessed a rise in vacancy over the same period, from 13.8 per cent in January to 14.5 per cent in July,” Mr Mountford said.
“Despite almost 40,000sqm of withdrawals, vacancy increased as a result of 25,000sqm of supply additions, coupled with negative demand.
The Gold Coast office market has also bucked its recent trend and recorded a 1.4 per cent increase in vacancy over the first six months of 2018, edging up to 12 per cent.
“This result can be attributed to an additional 3,000sqm of B Grade stock coming online, as well as a significant tenant move in Robina.
“With minor supply additions coming to market in the second half of 2018 and no new space due to come online from 2019, the Coast will have the opportunity to work through the remaining vacant stock over the coming year,” concluded Mr Mountford.