Brisbane’s office market continues to improve with the Property Council of Australia reporting the CBD vacancy rate fell from 14.7% in July 2018 to 13.0% in January this year. The decline was assisted by increased tenant demand combined with the withdrawal of Brisbane’s Transit Centre.
Increased demand for speculative fit-outs
Contiguous space options have been limited, placing upward pressure on net face rents with incentives showing the first signs of tightening since 2016. Speculative fitouts remain in high demand, and have leased substantially faster than alternative space. In a sign of increased market confidence, landlords are speculatively fitting out spaces up to 1,800sqm. At 300 George Street nearly 50,000 sqm of vacant and speculatively developed space will come online later this year.
Future office outlook looks promising
The CBD office market outlook has been strengthened by numerous positive factors, but most notably a wave of infrastructure development projects including the $5.4 billion Cross River Rail, Brisbane Metro and the Queen’s Wharf integrated Casino and Resort. In addition to the infrastructure projects, the combination of growing interstate migration, economic growth, and a Gross State Product which is forecast to outperform neighboring states, is likely to assist Queensland’s recovery as it continues to grow.