Virgin Australia is scanning candidates for its potential new Brisbane headquarters

Australia’s second largest airline is restructuring and kicked off a `review’ of its office requirements which includes a potential new headquarters in Brisbane.

Australia’s second largest carrier is weighing its long-term head office options in Brisbane as part of a restructure under its new owners.

Virgin Australia, which was hit hard by the coronavirus pandemic, went into administration last year and left its Bowen Hills headquarters and secured Flight Centre’s vacant floors in the Southpoint tower in South Bank.

Their lease in the 15-level tower at 275 Grey St expires in 2023, and Virgin has gone out to the market through CBRE to scout for potential long-term headquarters in the Brisbane CBD and near city.

Last year the Queensland Government through its investment arm QIC made a 10-year deal with new owners Bain Capital to keep the carrier’s headquarters in Brisbane and most of its staff.

The office review comes two weeks after new owner Bain Capital unveiled a new-look executive team and started the process of cutting 350 head office staff as the airline strives to carve 3000 jobs from its payroll.

The cuts are expected to be the last as the carrier emerges from administration with a workforce of up to 6000 people.

Market sources say Virgin Australia has a “soft requirement” in Brisbane for between 7000sq m and 8000sq m.

While they could stay put at the Southpoint office tower, potential new headquarters could also be in the almost completed Midtown Centre, Rio Tinto’s former space at 123 Albert Street, Charter Hall/Investa’s proposed tower at 360 Queen Street and Investa’s 179 Turbot Street tower in the CBD.

In the near city potential sites include the Kaias family’s Mobo office building at 88 Tribune Street in South Brisbane which will be completed by the end of the year, the proposed office tower at 31 Duncan Street in Fortitude Valley and Lendleases’ mooted second wooden office building at the RNA showgrounds.

An artist's impression of the Kaias family's Mobo commercial development at South Brisbane.

A Virgin Australia spokesman said the carrier was committed to playing its role as a major generator of economic activity for Queensland and had no immediate plans to leave the Southpoint tower.

“(However), because of COVID-19 impacts, we are much smaller than we were, and are conscious of the need to rethink working arrangements that provide more flexibility for our people,” he said

“We have already shifted into more fit-for-purpose space in Brisbane’s Southpoint, closed Tigerair’s headquarters in Melbourne and consolidated our corporate presence in Sydney.

“While we have no intention to relocate our Southpoint headquarters in the short-term, we’ll continue to review our property footprint to ensure it best matches the size and shape of our business moving forward.”

As part of the review through CBRE Virgin was also looking at long-term office options in Sydney.

The review comes at a time when incentives for new office leasing deals are edging higher.

It is understood some deals in the Brisbane CBD and inner fringe are moving towards 50 per cent.

An artist’s impression of Charter Hall's proposed new office tower at 360 Queen Street in Brisbane.

Meanwhile accountants KPMG which are looking for about 8000sq m is expected to reveal a shortlist soon of which one outcome could be staying put at Riparian Plaza in the Brisbane CBD and potentially also 123 Albert Street and the Midtown Centre.

According to JLL Research the Brisbane CBD office vacancy edged higher to 14 per cent in the last three months of 2020 with 9100sq m of vacant space.

In the middle of last year the rate was 12.8 per cent.

JLL Head of Leasing – Australia, Tim O’Connor said: “We saw a notable increase in leasing inquiry from SMEs towards the end of 2020 and this should translate into an improvement in leasing activity over the first half of 2021.”