Brisbane's near-city markets set to put 'challenges' behind them
The rebound in the Brisbane CBD office market has not been good news for everyone, according to agents.
In fact, the near-city and fringe markets had faced some “challenges” because of it, said Knight Frank senior director office leasing Andrew Carlton, with tenants of all sizes looking at the CBD’s current value proposition.
“However, the fringe has seen some good renewals of tenants particularly across the A-grade market, with CPB Contractors being one example,” Mr Carlton said.
“At some stage, however, there will be that migration back to the near-city markets – history has shown this has happened in the past and it will happen again.”
Demand was coming from a broad base of industries, however, green shoots were evident in the engineering and mining sectors, he said.
Fringe office vacancy rates were stable due to a lack of new supply, which had also kept incentives static over the past six months.
The fringe office market continued to offer points of difference to the CBD, he said, including car parking and affordability.
“The building quality is very comparable to A-grade CBD buildings, especially with many new developments over the past five to seven years,” he said.
Another factor attracting tenants was the improved retail offerings.
“The Gasworks at Newstead has provided significant amenity, while in South Bank there’s new retail under the Flight Centre building and on Melbourne Street/Fish Lane, while in Milton there is new retail amenity on Railway Terrace.”
According to the Property Council of Australia, Brisbane near-city vacancy rates increased from 13 per cent in December 2016 to 14.1 per cent in December 2017.
Prime vacancy had increased from 11 per cent to 13.4 per cent over the same period, but the vacancy for secondary grade had reduced slightly from 15.2 per cent to 14.9 per cent.
