Brisbane’s office landscape has shown a remarkable turnaround and is expected to face a scarcity of prime-grade office spaces in 2024. The trend, a distinct "flight to quality," reflects the national market's inclination towards high-grade accommodations.
According to recent news reports, the exceptional performance of Brisbane’s office market continues to surpass expectations. Brisbane has exceeded its annual average with a significant absorption of office stock in the past year. The vacancy rate has also seen a noteworthy decrease from its previous high. This highlights an emerging issue: the potential for an under-supply in premium office spaces.
The strong pre-leasing activity in new developments demonstrates the burgeoning demand for quality office space. Consequently, rents for these prime spaces have escalated, reaching impressive figures per square meter. Modern corporates are increasingly willing to invest in premium accommodations for their workplaces.
With the upcoming Brisbane Olympics on the horizon, the Gabba stadium is expected to be a catalyst for growth in the city’s office market. The global event is expected to intensify the focus on developing 'next level' office infrastructures.
The shift in workplace dynamics due to the pandemic amplified the trend toward high-quality spaces. Employers are investing in prime real estate to offer more appealing work environments and to encourage employees to return to the office. Despite an overall vacancy increase, both prime and secondary-grade offices have seen rent growth through 2023.
This upward trend in the office market is consistent with the active leasing sector observed in other major cities. Rent improvements could enhance the appeal of well-managed assets and invigorate market segments.
Despite a slowdown in transaction activity due to investor caution reflecting the broader economic climate, the underlying strength in prime office markets like Brisbane’s remains evident.
As Brisbane gears up for the 2032 summer games, the city's office market will likely demonstrate resilience, particularly within its premium office spaces. This represents a strategic opportunity for investors and businesses to navigate the evolving landscape.