Surge in office demand sparks construction of three new office towers in the Brisbane fringe

Hundreds of millions of dollars worth of offices are being built in the Brisbane fringe in anticipation of a tightening vacancy rate.

An artist’s impression of the 14-storey Jubilee Place office tower in Fortitude Valley.

A SURGE in demand for more office space in the Brisbane fringe has sparked the construction of three new office towers.

CBRE’s office leasing agent Mel Pikos said vacancy was tightening in the fringe, particularly in South Brisbane, Newstead and Fortitude Valley, sparking developers into action.

Vacancy falling in Brisbane’s fringe office market on the back of jobs growth

Silverstone Developments has started building its speculative office tower at Newstead and there are more projects to come

There are currently three office building being constructed — Silverstone Developments eight-story Stratton St development in Fortitude Valley, the Kaias family’s 12-storey Mobo tower at Tribune St, South Brisbane, and the Credit Suisse Asset Management owned 14-storey Jubilee Place on St Pauls Tce, Fortitude Valley.

“Astute developers are getting office buildings out of the ground, without any or (Jubilee Place) with some precommitments,” Mr Pikos said.

“This latest supply pipeline will be finished by the end of 2021 and we believe the extra space will be absorbed.”

An artist's impression of the Kaias family's Mobo office tower at South Brisbane.

Mr Pikos and colleague Michael Skarparis recently secured more expansion space for the Queensland Children’s Hospital in South Brisbane.

Children’s Health Queensland has an eight-year lease near the hospital on Level 2 at 55 Russell St, South Brisbane.

The 1461sq m office comes along with five on-site car parks in a deal that market sources would have been for between $545 and 565/sq m gross.

Mr Skarparis said the agreement included incentives in the form of a contribution to fit-out and rental reduction over the term.

“To accommodate its growth, Children’s Health Queensland was looking for another site close to the Children’s Hospital,” he said.

Children’s Health Queensland’s to space on level 2 at 55 Russell St, South Brisbane.

Melbourne-based property fund manager Forza Capital bought the three-level building earlier this year for $23.65 million.

Mr Pikos said the sale included a rental guarantee for Level 2.

“The new owners have a lot of confidence in the Brisbane market and they took a punt with that floor being vacant and we leased it for them before the rental guarantee expired,” he said.

“That was positive absorption in a tightening market.”