Brisbane’s CBD office vacancy rate has reached a new record low of just 0.7%, to remain the second tightest CBD office market in the country, behind Perth (0.5%).
Brisbane’s Near-city market (2.0%) was also ranked second tightest amongst Australian non-CBD office markets, despite a slight increase in vacancy over the past six months (up from 1.3% in July 2007).
The Property Council of Australia’s January 2008 Office Market Report shows challenging times ahead for Brisbane’s office markets, despite good performances over the past six months.
Queensland Executive Director, Steve Greenwood said both markets were in need of relief, in the form of high-quality supply additions.
“With all levels of space experiencing very tight vacancies, including A Grade at only 0.1% in the CBD and 0.6% on the fringe, rents have escalated sharply for tenants trying to negotiate leases over the past 12 months.” Mr Greenwood said.
“New supply is needed in order to ease the pressure on businesses, and ensure these markets remain healthy.
“The good news is there’s a substantial amount of supply coming online in both the CBD and Near-city markets during the next two years.”
The Brisbane CBD will receive an extra 151,258 sqm of stock in 2008 (of which 46% is pre-committed), followed by 161,014 sqm in 2009.
The Near-city market will receive 137,311 sqm in 2008 (of which 67% is pre-committed), followed by 44,642 sqm in 2009.
“Despite these record amounts of new stock entering the market, vacancy rates are unlikely to blow out as there’s adequate demand to fill them.” Mr Greenwood said.
“Around 22,500sqm of space was taken up over the past six months, even after taking into account high levels of withdrawals for refurbishment and demolition.
“As long as we continue to fill these new and refurbished buildings, we’ll avoid the challenges associated with a burgeoning vacancy rate. At the moment, the market is looking healthy.”