Over the six months to July 2024, Brisbane’s CBD vacancy rate experienced a substantial decrease from 11.7 per cent to 9.5 per cent. The drop in vacancy was due to the combined factors of strong demand with 26,552sqm of net absorption as well as 40,338sqm of office stock being withdrawn from the market.
Queensland Executive Director of the Property Council Jess Caire explained that the results continued to underline strong demand and interest in Brisbane from businesses and investors.
“The fact that 2024 Brisbane office vacancy would be at its lowest level in over 10 years would have been unthinkable in midst of the pandemic when many businesses were questioning whether they even needed a workspace,” Ms Caire said.
“Brisbane and South-East Queensland have the lowest office vacancy rates in the country, proving what all Queenslanders know – we are the place to be for any business with ambitions to grow.
“Demand is not isolated to Brisbane’s CBD – the fringe markets also performed remarkably well with the overall vacancy rate for the fringe dropping from 13.9 to 12 per cent over the last six months.
“However, as we all know strong demand can present its own challenges if not managed correctly.
“We are experiencing shortages across all property sectors including housing, industrial property and health infrastructure.
“All of these shortages are driven by the same unhealthy recipe – runaway demand combined with policy and planning settings not agile and responsive enough to keep pace with growth.
“While a lack of office space may not seem as dire as the housing shortage, we simply cannot sustainably respond to population growth without places for people to work.
“Building an office building is a massive undertaking with future projects such as 360 Queen Street, 205 North Quay and Waterfront all proposed prior to 2020.
“The future is bright for Brisbane, investors from around Australia and overseas are looking to inject capital into our state and create new jobs.
“We just need to ensure that we are prepared to properly harness this momentum to ensure we grow sustainably,” Ms Caire said.
Knight Frank Partner Jennelle Wilson explained that this result is the fruition of sustained prime take-up in a climate of no new supply.
“The Brisbane CBD is in the fortunate position of currently having double digit effective annual rental growth and single digit vacancy, Ms Wilson said.
“This sets Brisbane apart as one of the few major commercial markets to have prospered in the past four years and this will no doubt only intensify investor interest in our market.
“The improvement over the past six months has again come from the A Grade space with another 42,000sqm of net absorption – with a total of over 80,000sqm of A grade absorption in the past year.
“This, combined with an already tight premium market, has brought prime vacancy down to 7.2 per cent – a 12-year low.
“Strong take-up was also seen in the Fringe market with all precincts recording positive net absorption and broad-based demand,” Ms Wilson explained.
