Mining sector jobs upswing lifts Brisbane office market with strong demand for new digs

It is not expected to be another boom but increased optimism and investment in one of Queensland's biggest industries, coupled with strong jobs and population growth, is strengthening demand in the Brisbane office market.

Mining companies are digging for more and new space again in the Brisbane office market.

THE mining industry is back staking its claim in the Brisbane office market with continued strong demand from the sector for the first time since it came off the boil in 2015.

According to Sam Allam from JLL’s office leasing team, there is a definite upswing in the industry that was now “rolling out” to the city’s office sector.

“Demand from mining and related tenants within the Brisbane office market has definitely picked up, and it looks like it will stay strong over the course of the next 12 months,” he said.

“We aren’t expecting another boom like we experienced in 2010, but we are seeing more mining investment coupled with strong jobs and population growth that is strengthening office demand.

“There is a definite upswing in the industry, and it is now rolling out to the office sector as companies require more and new space.”

An upswing in Queensland’s mining sector is “rolling out” to the city’s office sector.

Mr Allam said within the past three years about 80,000sq m of space has been leased to mining, engineering or construction-based companies.

He said the recent decision for Rio Tinto to pre-lease 19,000sq m in the development-approved Midtown Centre supported a positive outlook for the industry.

“While Rio’s move has been a like-for-like in terms of size commitments, they have strengthened their workforce considerably.

“Adding more staff into less office space at their new property will mean a more agile and efficient office layout design,” Mr Allam said.

He said that other notable mining and mining related businesses that had recently or will imminently commit to new office space included New Hope Group seeking 2000-2500sq m of CBD office space; Deswik Mining, which secured 2640sq m in 348 Edward St; Golder Associates which is seeking 2000sq m, and BHP looking to commit to an additional 7000sq m of CBD space.

The positive mining outlook is driving office activity.

Mr Allam said there also had been a number of leases under 600sq m that reflected the increase in related mining industry companies re-entering the sector or moving from fringe and outer suburbs back to the city.

JLL Research analyst Alyssa Hutchinson said since 2018 there had been several commodities join the employment market again.

“In addition, ABS data released in May, highlights total mining employment across Australia has increased 7.5 per cent for 2017-2018,” she said. “Over the same period, Queensland’s employment increased 4.9 per cent, just behind Western Australia at 6.3 per cent.

“As commodity prices continue to recover, we could see other renewables add demand for office stock.

“Figures from the ABS show the highest level of estimated full-time equivalent (FTE) employment in renewable energy since 2011-2012. Queensland reported the largest increase of FTE renewable jobs reflecting a 44 per cent increase, with Victoria and NSW following.”

Mining employment is on the increase again in Queensland.

Ms Hutchinson said the approval of the Adani Carmichael thermal coal mine would be a game changer for employment and economic activity in the state, particularly regional areas such as Townsville.

“This approval will likely increase optimism in the sector, which could result in more companies thinking about progressing projects as well as expanding their local teams meaning an increase in our local office demand,” she said.

“We expect the next capital expenditure cycle in mining to be more modest than the previous cycles, however, global demand for our resources will drive investigates into a range of emerging sectors such as renewable energy, telecommunications, defence, aerospace, automotive, and agri-tech.”