Brisbane office markets bounce back

Healthy demand for office space across Brisbane has seen vacancy rates fall over the first half of 2019.

The Property Council of Australia’s latest Office Market Report, released today, shows that vacancy across the CBD has dropped from 12.9% to 11.9% over the last six months. Vacancy in the Brisbane Fringe fell from 15.7% to 13.8% over the same period.

“The improvement in the vacancy rate is welcome and confirms that Brisbane’s office market is recovering from recent record high vacancy rates,” Queensland Executive Director of the Property Council, Chris Mountford, said.

“Brisbane CBD is now at its lowest level of vacancy since July 2013, with strong demand recorded for Premium and B Grade stock.

“While there has been some office buildings withdrawn from the market for redevelopment, new demand is playing a big role in bringing down the vacancy rate.

“The Brisbane Fringe, in particular, has experienced a significant increase in demand over the first half of this year, with A Grade stock being the most sought after in this market.

“The Brisbane office market is clearly in the midst of a good recovery, with confidence that demand will continue to grow and strong investment underway in new office projects.

“Unfortunately, the Government’s decision to dramatically increase land tax in the recent State Budget sends the wrong message at the wrong time.

“Overseas investors play a critical role in the development of new office projects in Brisbane.

“Targeting these investors with astronomical tax increases will only result in higher rents for Queensland businesses, and a slowing of the Brisbane market’s momentum,” Mr Mountford said.

The Property Council is engaging with the Queensland Government to influence the final structure of the new 2% foreign land tax surcharge.

To view select Office Market Report data series, visit the Property Council’s Data Room

 

Media contact: Chris Mountford|  M  0408 469 734 |   E  cmountford@propertycouncil.com.au

 

Office Market Report July 2019
Analysis – Brisbane CBD market

Headline comments:                                

  • Brisbane CBD vacancy decreased in the six months to July 2019
  • This was due to withdrawals and positive demand
  • The A and C Grade segments recorded negative demand
  • Negative demand was concentrated in the C Grade segment
  • There is some space in the pipeline over the short to medium term

 

Vacancy analysis:

  • Brisbane CBD’s vacancy rate decreased from 12.9 percent to 11.9 percent
  • This was due to 15,417sqm of withdrawals and 8,947sqm of net absorption

 

Future supply:

  • 47,700sqm of space is due to come online in the second half of 2019
  • This will be followed by 7,200sqm in 2020
  • 114,540sqm of space is due to come online from 2021 onwards

 

Key market indicators, Brisbane CBD (aggregate)

Grade

Vacancy,

Jul 19 (%)

Vacancy,

Jan 19 (%)

Net absorption, 6 months to

Jul 19 (sqm)

Net absorption, 12 months to

Jul 19 (sqm)

Premium

8.7

10.4

5,666

4,712

A

10.0

9.9

-742

15,795

B

14.5

17.1

7,239

18,177

C

15.1

14.1

-4,271

-1,791

D

18.8

20.8

1,055

-2,754

Total

11.9

12.9

8,947

34,139


 

Office Market Report July 2019
Analysis – Brisbane Fringe market

Headline comments:

  • The Fringe market’s vacancy decreased over the period
  • This was due to positive demand
  • All grades have vacancy above 12 per cent
  • Only the B Grade segment recorded negative demand over the period
  • There is little supply due to come online over the next 18 months

 

Vacancy analysis:

  • Brisbane Fringe’s vacancy decreased from 15.7 per cent to 13.8 per cent
  • This was due to 32,628sqm of net absorption and 620sqm of withdrawals
  • 11,880sqm of space was added over the period

 

Future supply:

  • 3,500sqm of space is due to come online in the second half of 2019
  • No space is planned for 2020
  • This will be followed by 22,738sqm from 2021 onwards
  • 100,438sqm is mooted for this market

 

Key market indicators, Brisbane Fringe (aggregate)

Grade

Vacancy,

Jul 19 (%)

Vacancy,

Jan 19 (%)

Net absorption, 6 months to

Jul 19 (sqm)

Net absorption, 12 months to

Jul 19 (sqm)

A

12.7

16.7

35,135

44,139

B

15.7

13.5

-7,247

-3,742

C

13.0

14.4

3,355

3,654

D

40.7

58.2

1,385

1,385

Total

13.8

15.7

32,628

45,436