Brisbane, 6 April 2014- The
latest Office MarketView from CBRE reports that Brisbane experienced an
exceptionally strong year for investment, exceeding record levels set in 2007.
sales of $5 million plus were above the $3 billion mark for the year, with a
record $2.5 billion in the CBD and a strong $787 million in the Near
4 was particularly strong, with sales
volume totalling $1.1 billion. CBD assets selling in the quarter included a 50%
share in 1 William Street for $396.7 million and 179 Turbot Street for $172.3
million. Major sales in the near city included 15 Green Square Close for $110
million and 154 Melbourne Street for $71.5 million.
Claire Cupitt, CBRE’s Associate Director of
Research, said that demand from offshore and onshore funds seeking high
yielding investments has supported a firming of prime yields, by 35 basis
points in the CBD and 20 basis points in the Near City.
“With some investors now being priced out of
prime stock, secondary assets are attracting higher levels of interest, despite
high vacancy levels. As a result, there are also signs emerging of yield
compression in secondary stock, although the yield spread to prime assets
remains wide,” said Ms Cupitt.
Investment Activity, Brisbane
The office leasing market weakened
considerable during 2013, largely a result of Queensland state government
rationalisation and resource services firms downsizing.
CBD net absorption over the year was negative
98,800sqm, the worst result on record. Both direct and sublease vacancy has
risen, with over 310,000sqm of vacant space identified (14.2%). The report states that over 90,000sqm of
vacant space is sublease, including large tranches from Arrow Energy,
Queensland Rail and Rio Tinto.
In the Near City, negative net absorption of
5,400sqm was recorded over the year. Vacancy is sitting at 12.7% as of January
2014, with the prime vs secondary asset split increasing.
“Prime vacancy is sitting at 11% in the CBD
and 9.3% in the Near City, with secondary vacancy rates at 17.3% in the CBD and
16% in the Near City.”
Q4 saw a small number of major leases signed,
these include; QBE Insurance and the Australian Government Solicitor occupying
a combined three floors at 145 Ann Street in the CBD totalling 3,305sqm; and
Flight Centre taking 1,700sqm at 108 Wickham Street, Fortitude Valley for two
Despite weak occupier demand and high vacancy,
the pipeline is somewhat active. However, the next major building in the CBD
will not be finished until 2016 (1 William Street), which should allow for some
of the existing space to be leased.
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2013 revenue). The Company has approximately 44,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 350 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website atwww.cbre.com.au.