Industry experts reports that Brisbane's office market has stabilized in the first half of the year with transactions up from previous year. Meanwhile, the rate of office vacancies for July fell to 15 percent, down from January's 15.5 percent.
According to the Urban Developer, the figures are based on the office market report released by the Property Council of Australia on Thursday, August 6, which showed a slight decrease of office vacancies in Brisbane's central business district (CBD). Mark McCann, Colliers International National Director of Office Leasing, commented that the figures showed a stable first half, with volumes and inquiries higher than last year. McCann added that the slight decrease in the overall vacancy rate for the period is a result of "stock withdrawals for conversions and some positive take-up through leasing activity." However, he said that this is only temporary and warned that the overall vacancy is "expected to spike from 2016 onwards after completion of new developments and associated backfill." A few of those new developements includes office projects at 180 Brisbane, 480 Queen Street and 1 William Street.
The Urban Developer report further enumerated the factors and sectors that resulted to the positive changes in Brisbane's office market. According to McCann, the largest contributor to new tenant demand in Brisbane's CBD for the period came from the IT, education and training sectors. He also noted that prime market vacancy has stabilized and will continue on until the end of the year. McCann added, "Business confidence is returning with a positive indicator being the reduction of sublease space as a result of anticipated business growth."
However, a report from Brisbane Times is also attributing the positive change to the local government's initiatives to house the city's increasing student population. In February, Lord Mayor Graham Quirk announced the reduction of infrastructure charges for purpose-built student accommodations. This led to an increase in development applications for both new and re-purposed buildings. Chris Mountford, Property Council of Australia Queensland executive director, said that the effect of the city government's policies was almost immediate.
Mountford added, "Policies introduced by Brisbane City Council have kicked started the conversion of older office buildings in the CBD into new uses such as hotels and student accommodation. However, with the amount of new stock entering the market and a continued 'flight to quality', further options for conversion and adaptive reuse need to be considered."
