Brisbane is currently a tenant’s market. It has affordable rental rates compared to some of Australia’s other major capital cities, along with high vacancy and attractive incentive levels.
Average gross rental rates for A-Grade spaces in the Brisbane CBD have remained steady over the past 12 months at about $690 per square metre. This rate is cheaper than the CBD averages in Sydney ($1,245), Melbourne ($745) and Perth ($730). Average rates are $575 per square metre for A-Grade premises on the Brisbane city fringe.
However, the incentive levels for office space in Brisbane average 36% in the CBD and nearly 38% on the fringe. This is double the average incentive rates in the Sydney CBD, and ahead of what’s on offer in both the Melbourne and Adelaide CBD markets.
Vacancy rates for A-Grade office space in the Brisbane CBD and on the city fringe are currently just under 15%. This figure is well above the national average of just over 9%. It gives tenants (and potential tenants) plenty of negotiating power.
Stock levels have declined slightly in both the CBD and fringe markets in the past quarter, and there is limited new stock under construction for the next three years.
Many Brisbane tenants are seizing the opportunity to either relocate to better buildings or to renegotiate the terms of their existing leases while the market is low. This includes some tenants “recentralising” from the fringe to the CBD. However, the Queensland economy is currently growing at faster than the national average. So, the affordable rental rates that are currently on offer could rise in the short-to-medium term off the back of strengthened demand.
Our specialist knowledge of the Australian commercial property market gives our clients the competitive edge when it comes to finding the best space and negotiating the terms and conditions of their lease.
If you need tenant representation services in Brisbane, contact our team today!