Brisbane CBD office vacancy tightens as tenants seek quality A-grade space
BRISBANE CBD office vacancy tightened in the fourth quarter last year with new tenants taking the “flight to quality” option, electing to upgrade to premium and A-grade buildings.
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BRISBANE CBD office vacancy tightened in the fourth quarter last year with new tenants taking the “flight to quality” option, electing to upgrade to premium and A-grade buildings.
JLL’s latest office survey revealed that CBD office vacancy fell to 13.2 per cent at the end of the year compared to 13.9 per cent in the third quarter.
However, Brisbane remained well behind the national CBD office market vacancy rate which tightened to 8.6 per cent, the lowest level since 2012.
JLL Head of Research – Australia, Andrew Ballantyne, said the recovery in Brisbane was being led by both public and private demand.
“The public sector remains in expansion mode in the Brisbane CBD, but we’re starting to see more activity from private sector organisations,” he said.
“The number of genuine options in prime grade space are starting to reduce and effective rents are moving higher.”
Over 2018 the prime to secondary vacancy rate spread widened further with premium and A-grade office vacancy tightening to a six-year low of 7.2 per cent while the B-grade and C-grade vacancy rate remained elevated at 19.7 per cent.
According to JLL the Brisbane fringe recorded a negative net absorption of 9551sq m in the last quarter of 2018 increasing to 16.3 per cent, compared to 15.2 per cent in the previous quarter.
The negative absorption was driven primarily by the Spring Hill precinct, which recorded 11,578sq m of extra vacant space.
Mr Ballantyne said the leasing market shook off concerns over the volatility in global equity markets over the latter part of 2018.
“It did little to impact leasing activity with organisations willing to read through the noise and commit to long-term leases,” he said.
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