Brisbane CBD Office Market Takeaways
It was a pleasure to moderate the CoreNet Global State of the CRE Market panel in Brisbane last week with panellists Laura West of White Partners and Tom Broderick of CBRE. The focus was the Brisbane CBD office market and the trends that are (or will) affect office occupiers.
Brisbane is not only enjoying the enthusiasm that comes with winning the Olympics but enjoying its time in the sun in a brisk post 2020 economy. It is a smaller market than its southern neighbours, and as a result, it has fewer super tenants, is experiencing less subleasing, and is not feeling the same effects of the gradual decrease in office space needs. The mood is positive and upbeat.
The general statistics for the Brisbane CBD office market according to the PCA are:
- Stock 2,343,569 m2 or 5% of the total Australian office market
- Vacancy is 11.7% of which only 0.4% is sublease
- Absorption – 6 month positive net absorption average in the 5 years to January 2020 was 13,093 m2
- Absorption – 6 month positive net absorption average in the 4 years since January 2020 has been 12,120 m2
Our 2 take aways from the evening event are;
- Government office space
- Office occupier utilisation rates.
The government leases a huge portion of the Brisbane CBD office market. Over the longer term, new government WFH guidelines may affect the amount of office space required by government tenancies. Only time will tell.
The reduced utilisation rates of larger corporates predominantly located in the southern capitals has not yet been an issue. With a larger proportion of local business, the effects of this structural change may not arise as smaller tenancies tend to have higher utilisation rates. But head office mandates, increased costs (rents), and a cautious economic outlook will apply pressure on many occupiers to seriously consider less office space than today.
Simply put, if your desks were only 80% occupied prior to Covid, why lease more space than one needs.
The evening ended with refreshments and enthusiastic chatter around the topics raised by the panel. If you would like to be part of it, come along to the next Brisbane panel or join us at one of the upcoming events in Sydney, Perth, Adelaide and Melbourne.
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