Why Brisbane CBD’s office sector is enjoying robust tenant activity

The flight-to-quality is attracting more workers to go into the offices.

Despite market uncertainties, JLL reports that robust tenant activity was recorded in the Brisbane CBD. Leasing demand was strong in Brisbane CBD with positive net absorption of 7,696 sqm over Q1 2023. 

“The flight-to-quality theme continued where anecdotally, this has brought more of the office population back into the CBD this quarter with better spaces to work from, social events to attend and a more collaborative atmosphere,” the analyst said.

Here’s more from JLL:

The Waterfront Brisbane project commenced this quarter. The project is due to add 69,000 sqm to the office sector and is due for completion in 2028. There was no new supply expected in Brisbane CBD in Q1 2023. Three major office projects are due for completion between Q4 2023 and Q3 2025. Plans have been submitted for 101 Albert Street, Brisbane CBD, a 40-storey development.

Large tenants continue to be active. Seven large occupier moves occurred this quarter. Expansion occurred in the health care and social work industry, recruitment, and public administration and safety. Contractions occurred within the finance and insurance services, as well as certain professional services including computer system design and related fields.

Despite macroeconomic uncertainties, tenants have been active in Brisbane CBD. As a result of positive net absorption and general expansion among tenants, headline vacancy decreased 0.3 pps q-o-q and 1.4pps y-o-y. Prime vacancy decreased to 14.3% (from 14.7% in Q4 2022) and secondary vacancy decreased to 12.6% (from 12.8% in Q4 2022). Given the ongoing trend of tenants prioritising quality office spaces for their workforce, it is likely that demand will persist for prime grade assets, reducing vacancies.