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The Queensland office market experienced a drop in vacancy rates in the final half of 2016 thanks to healthy demand for office space across the state's major market areas.
This was revealed by the Property Council of Australia’s latest Office Market Report, which was released today.
The report shows vacancy across the CBD dropped from 16.9% to 15.3% over the last six months, despite the addition of developments like 1 William Street to the Brisbane skyline.
“The improvement in the vacancy rate is welcome and reflects the best improvement in any CBD vacancy rate across Australia – however, Brisbane is still in the bottom half of the pack when it comes to CBD vacancy rates,” Property Council QLD Executive Director Chris Mountford said.
“While there has been some office buildings withdrawn from the market for redevelopment, new demand is also playing a big role in bringing down the vacancy rate.
“Demand for office space in the Brisbane CBD is now more than five times higher than historical levels.”
Positive demand has not been limited to the CBD, with the Brisbane Fringe market experiencing a similar demand-driven drop in vacancy from 12.9 to 12.6 per cent.
The Sunshine Coast and Gold Coast office markets also recorded some of the sharpest declines in vacancy across Australia, with the two cities now sitting at 6.9 and 12.2 percent office vacancy respectively.
“While it is positive to see demand and withdrawals keeping pace with new supply over 2016, Queensland is still experiencing historically high office vacancy,” Mr Mountford said.
“In this critical election year, it is imperative that the State Government work to boost business confidence to invest and create jobs in Queensland.”
Brisbane CBD vacancy decreased in the six months to January 2017
This was due to withdrawals and positive demand
The upper grades of space recorded positive demand, while the lower grades recorded negative or low demand
There is no space in the pipeline from 2018 over the medium term.
Brisbane CBD’s vacancy rate decreased from 16.9 percent to 15.3 percent
This was due to 57,676 sqm of withdrawals and 50,048 sqm of net absorption
75,853 sqm of space was added over the period
The upper grades of space recorded positive demand, while the lower grades recorded negative or low demand.
A total of 18,450 sqm is due to enter the market in 2017
No space in the in the pipeline after that in the medium term
47,700 sqm of space is mooted.
The Fringe market’s vacancy decreased over the period
This was due to positive demand
All grades have double digit vacancy
Only the A Grade segment recorded significant positive demand
There is no space due to come online in the medium term from 2019.
Brisbane Fringe’s vacancy decreased from 12.9 percent to 12.6 percent
This was due to 16,535 sqm of net absorption
23,800 sqm of space was added over the period while 9,713 sqm was withdrawn
All grades of space have double digit vacancy
Only the A Grade segment recorded significant positive net absorption.
No space is due to come online in 2017
35,625 sqm of space is due to enter the market 2018
No space is in the pipeline after that over the medium term
17,813 sqm is mooted for this market.
Vacancy in the Gold Coast office sector decreased over the six months to January 2017
This was due to positive demand and withdrawals
Only the D Grade segment a vacancy increase over the period
All locales recorded positive demand except Broadbeach
There is no space due to come online from 2019 onwards.
Vacancy decreased from 14.3 percent to 12.2 percent over the six months to January 2017
The vacancy decrease was due to 10,088 sqm of net absorption and 2,824 sqm of withdrawals
2,741 sqm of space with withdrawn over the period.
A Grade – vacancy in this segment decreased from 18.7 percent to 12.9 percent due to net absorption of 5,849 sqm and withdrawals of 2,059 sqm
B Grade – vacancy decreased from 12.4 percent to 11.1 percent due to 4,266 sqm of net absorption
C Grade – vacancy in this segment decreased from 12.9 percent to 12.4 percent due to net absorption of 694 sqm
D Grade – vacancy increased from 12.2 percent to 17.0 percent due to -721 sqm of net absorption.
Broadbeach – vacancy increased from 8.8 percent to 10.8 percent due to -605 sqm of net absorption
Bundall – vacancy decreased from 16.9 percent to 14.1 percent due to 2,370 sqm of net absorption
Robina-Varsity Lakes – vacancy decreased from 10.0 percent to 6.9 percent due to 4,999 sqm of net absorption
Southport – vacancy decreased from 15.5 percent to 13.2 percent due to 2,724 sqm of net absorption and 765 sqm of withdrawals
Surfers Paradise – vacancy decreased from 19.3 percent to 18.4 percent due to net absorption of 600 sqm.
4,024 sqm of space is due to come online in 2017
There is 2,744 sqm of space in the pipeline for 2018
No projects due to be completed from 2019 onwards
A total of 4,000 sqm of projects are mooted.
Vacancy in the Sunshine Coast decreased in the 12 months to January 2017
The was due to positive demand
With the exception of D grade which remained steady, all grades of space recorded vacancy decreases over the period
No space is in the pipeline over the medium term from 2018.
Total vacancy decreased from 9.2 percent to 6.9 percent in the year to January 2017
This was due to 3,448 sqm of net absorption
With the exception of D grade which remained steady, all grades of space recorded vacancy decreases over the period.
22,534 sqm of space is due to come online in 2017
There is no space in the pipeline to be delivered from 2018 onwards
3,880 sqm is mooted.
