In excellent news for investors, the Brisbane CBD office market is one of the most dynamic in Australia, driven by low vacancy rates and significant government infrastructure investments. 

The vacancy rate in Brisbane CBD offices has tightened significantly this year, in part due to Queensland’s strategic use of short, sharp lockdowns during the pandemic. While many other capital city markets are still grappling with the fallout of remote work trends, Brisbane’s city core remains vibrant. 

In the first half of 2024, Brisbane’s CBD vacancy rate dropped significantly from 11.7% to 9.5%, the lowest in over a decade, according to the Property Council’s Office Market Report[i]. This tightening was driven by solid demand, with 26,552 sqm of net absorption and the withdrawal of 40,338 sqm of office space from the market.

Sydney’s CBD office vacancy rate fell from 12.2 to 11.6% over the same period, and Adelaide witnessed a drop from 19.3% to 17.5%. However, three CBD markets saw an increase in vacancies. Melbourne’s vacancy rate increased from 16.6% to 18%, Canberra’s from 8.3% to 9.5%, and Perth’s from 14.7% to 15.5% - these increases are primarily due to the influx of new quality office space[ii] rather than a decline in business confidence.

Brisbane’s rapidly growing workforce, driven by Queensland’s population boom, further bolstered the CBD office market’s strength[iii]. Additionally, the almost completed $3.6 billion Queen’s Wharf development, set to open this month[iv], and the city’s nearly $7 billion train tunnel project, Cross River Rail, slated to commence in 2026[v], are also key contributors to office market momentum.

Office market surge set to extend beyond the CBD north and south 

The demand for office space is not confined to the Brisbane CBD. Fringe markets are also experiencing a positive shift, with a notable decrease in vacancy rates from 13.9% to 12%, as per the Property Council’s research. Chris Nicholl, General Manager of Raine & Horne Commercial, foresees this encouraging trend spreading to Brisbane’s metropolitan areas, particularly in the city’s south and north. 

“It’s a significant advantage for the Sunshine State that Brisbane’s office market is experiencing such strong demand," Chris said. "The ongoing growth in the CBD office market is expected to create a ripple effect that will extend to metro markets.”

Chris observed that the industrial markets in metropolitan areas continue to be the strongest among the property sectors, though they have softened somewhat compared to 18 months ago. In contrast, metropolitan office markets are currently soft, with listings staying on the market longer and significant leasing incentives being offered. 

“That said, the current demand levels present strong opportunities in metro markets, where Raine & Horne Commercial has a robust presence through our Brisbane North and Brisbane Southside offices, for businesses seeking office space over the next 12 months,” he said.

“On the sales front, there will be buying opportunities for small and medium-sized businesses and investors with low gearing to snap up office space.”

Chris continued, “We expect the current cycle to peak within the next 12-18 months. As interest rates stabilise and the momentum from the CBD extends to metro markets in the city’s north and south, these office markets are poised for a rebound. 

“The approaching Brisbane 2032 Olympics and the increased demand for space from businesses supporting Olympic activities will further drive market activity.”

For more information about commercial real estate markets in metropolitan Brisbane, contact Raine & Horne Commercial Brisbane North at (07) 3352 8900 or Raine & Horne Commercial Brisbane Southside at (07) 3216 6666

[i] https://www.propertycouncil.com.au/media-releases/brisbane-office-vacancy-lowest-in-over-a-decade
[ii] https://www.propertycouncil.com.au/media-releases/vacancy-falls-with-positive-demand-for-office-space

 
[iii] https://www.qgso.qld.gov.au/issues/3071/population-growth-highlights-trends-qld-2024-edn.pdf
[iv] https://queenswharfbrisbane.com.au/
[v] https://crossriverrail.qld.gov.au/about/frequently-asked-questions/