A wave of new office towers under construction will put pressure on the vacancy rate in the Brisbane CBD

The Brisbane CBD development landscape has changed with four new office towers under construction set to boost supply and lift the prime vacancy rate.

A WAVE office tower developments in the Brisbane CBD will lift the vacancy rate and put a brake on new projects as the market absorbs the influx of space.

JLL senior director and head of office leasing QLD Adam Barrett said currently there were four A-grade buildings under construction — Dexus’ 12 Creek St Annex, Mirvac’s 80 Ann St, Midtown tower on Charlotte St and the Shayher Group’s 300 George St in the Brisbane Quarter.

An artist's impression of Mirvac's office tower at 80 Ann St in the Brisbane CBD.

“From September 2019 to February 2022, we’ll have 158,000sq m of space completed, of which 90,000sq m is still vacant,” he said.

“At the moment there are extremely limited opportunities for large occupiers in the Brisbane CBD. In fact, there’s less than a handful of opportunities for tenants of over 3000sq m.

“But when these projects are completed there will be significant opportunities for larger occupiers.”

Mr Barrett said as well as the buildings under construction there will be considerable back space available with Rio Tinto and Suncorp precommitments totalling 59,000sq m to AsheMorgan and DMANN Corporation’s Midtown development and 80 Ann St.

An artist's impression of the Midtown Centre in the Brisbane CBD.

According to JLL’s latest Brisbane CBD figures net absorption in the first quarter of 2019 was 2100sq m reducing the office vacancy rate to 12.7 per cent, compared to 13.2 per cent at the end of 2018.

However, Mr Barrett said he expected the vacancy rate to lift, specifically in the prime market.

He said the development landscape in the Brisbane CBD has changed considerably.

“The Suncorp brief saw the beginning of the new commercial development cycle,” Mr Barrett said.

“Prior, there were only two development sites with a DA Approval in place — The Regent and 300 George St.

“But in the last 24 months there has been 11 proposed (470,000sq m) commercial development sites with seven DA approvals.

However, Mr Barret said the market will be more challenging for developers going forward given the current supply under construction.

“I think now is the time that developers will have to be more considered with their precommitment levels given the wave of construction under way,” he said.