Home Property Australia Office Market Report reveals Brisbane CBD Flight-to-Quality

Office Market Report reveals Brisbane CBD Flight-to-Quality

  • February 08, 2018

Office Market Report reveals Brisbane CBD Flight-to-Quality

The Property Council released its 2018 January Office Market Report at the first industry breakfast of the year on Thursday, 1 February. 

Matthew Miller, Regional Manager Qld – Commercial at Lendlease, provided the keynote presentation, outlining that vacancy across the CBD increased over the last six months from 15.7 to 16.2 per cent. 

Contractions in tenant demand for lower-grade stock across the CBD have contributed to this vacancy increase. Yet higher grade office space recorded positive tenant demand over the last six months, with a distinct flight-to-quality being observed in the data.

Matthew outlined that while Brisbane CBD vacancy is currently high, a significant number of tenant EOIs in the market are a positive sign for 2018, with many recently signed lease deals also not yet reflected in the numbers.

While vacancy levels rose slightly in the Brisbane CBD, the Brisbane Fringe market experienced a withdrawal-driven drop in vacancy from 14.6 to 14.1 per cent. 

The Gold Coast office market recorded a decrease in vacancy over the six months to January 2018, falling from 11.3 per cent to 10.6 per cent.

Vacancy in the Sunshine Coast increased in the 12 months to January 2018, following the completion of significant new office developments in 2017. The office vacancy rate on the Sunshine Coast rose from 6.9 per cent to 15 per cent despite strong tenant demand figures.

Following breakfast, Matthew moderated a panel discussion with Laura West, Associate Director – Occupier with CBRE, Anthony Ott, Managing Director- QLD with Savills and Jane McConnell, Director- jmid.

The panel analysed the growing tenant demand for a higher level of office space amenity. An ongoing challenge for asset owners has been creating ‘third space’ and flexible working environments due to headcount uncertainty over longer lease periods. All speakers predicted a fall in vacancy levels in 2018.

The Property Council would like to thank the speakers for sharing their insights and expectations for the year ahead, and Lendlease for its generous support of the event.

The Property Council’s press releases for Brisbane, the Gold Coast and the Sunshine Coast can be viewed here. A copy of the 2018 Office Market Report can be purchased here.

Photos from the event can be viewed here.

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