Brisbane CBD Today

March

10 March 2025

I headed to Brisbane last week to catch up with industry colleagues and clients, and to moderate a Corenet Global panel on the Brisbane CRE markets. We were joined by panellists Laura West of ACORPP and Tom Broderick of CBRE, who helped facilitate a fabulous discussion (thank you to them both). However this year, the mood was different to a year ago. Last year it was excited. This year it was befuddled. Why?

On the one hand, in 2024, rents increased, there are predictions of future undersupply, pre-commitments were healthy, and absorption remained healthy.

On the other hand, incentives are still very healthy, vacancy increased in the second half, there is almost 90,000 m² of space to be delivered this year, and absorption in the second half of 2024 was negative.

As at the beginning of 2024, the current status of the Brisbane CBD office market was:

– Vacancy 10.2%

– New supply for 2025 approx. 90,000 m² approx. 3.5% addition to total stock

– Absorption for the second half of 2024 negative 12,646 m² but positive for the year

– Absorption: 6 month positive net absorption average in the 5 years to January 2020 was 11,923 m²

– Absorption: 6 month positive net absorption average in the 5 years since January 2020 has been 11,087 m²

Our reading? For future supply (beyond Dexus’ Waterfront Brisbane project), it takes longer than it used to deliver a project, and the economic rents required to justify development are way too high. Landlords are aiming for overinflated rents, but tenants are baulking for many reasons; one being affordability. As a result, they are renewing or moving to better value properties – not flying to quality.

No wonder the mood was different. Looks like Brisbane is at that fork in the road between economic rents and affordable rents. Something may have to give. It reminds us of the Sydney CBD in 1994.