Organic business growth drives Brisbane's continued office market recovery
Business expansion underpinned by strengthening white collar employment growth is driving a continued improvement in the Brisbane CBD leasing market, with the city’s prime vacancy rate expected to reach 8.9% by the end of 2018 according to CBRE’s latest Australia Office MarketView report.
31 May 2018
The report highlights that top line economic conditions in Queensland are continuing to improve, boosting business confidence, investment and jobs growth.
CBRE Director James Comino said this momentum was driving a continued recovery in the Brisbane office leasing market – with organic business growth underpinning expanded space requirements.
CBRE is forecasting that the overall CBD vacancy will contract to less than 14% over the next 18 months - down from 16.2% at the start of 2018 - with the city’s prime vacancy to hit 8.9% by year’s end.
“The trend post GFC was for businesses to cut space by subleasing or relocating into smaller premises to increase their workspace density and ultimately reduce rental commitments,” Mr Comino said. “This is changing, with businesses, in certain industries, now back on the growth path and seeking more office space.”
Beneficiaries of this organic business growth include serviced office company The Workstation, which recently committed to an additional 800sqm premises, this time in 307 Queen Street at a rental of $665/sqm and Canstar, a financial comparison company that has tripled its office size in the past three years to 2,000sqm.
Continued white collar employment growth, which Deloitte Access Economics has forecast
11.35% over the next five years - far outweighing the previous five-year growth rate of 2.35% - combined with strong interstate net migration, is also driving demand for longer term lease solutions.
“Organic growth has been particularly evident in the IT, finance and construction industries, with growth also emerging in the areas of public administration, tourism, education and healthcare/social services,” Mr Comino said.
“This has been highlighted by the State Government completing circa 25,000sqm in lease commitments in the past 12 months and Queensland Tourism leasing 2,000sqm of space.”
Another driver for Brisbane will be the city’s circa $35bn project pipeline, which includes Queens Wharves, Cross River Rail and Brisbane Live.
“This pipeline will contribute significantly to increasing Brisbane’s employment base and has already resulted in immediate project requirements in the CBD,” Mr Comino said.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
Neither CBRE nor its affiliated companies make any warranties or claims on the implied accuracy of the information contained herein.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE: CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at https://www.cbre.com.