Brisbane CBD demand remains steady with strong net absorption recorded

• The Brisbane CBD recorded strong positive net absorption over the quarter, totalling 24,800 sqm. The small tenant cohort (>1,000 sqm) drove demand, accounting for 18,100 sqm of the result. Headline vacancy increased to 10.6%.
• Brisbane’s Near City recorded positive net absorption of 6,700 sqm, with up-take of prime space accounting for 97% (6,500 sqm) of this result. Headline vacancy improved to 10.3%.

One project reaches completion in Brisbane’s office market

• One project completion was recorded in Brisbane’s CBD, with the completion of 205 North Quay delivering 44,300 sqm to the CBD market. No project completions were recorded in the Near City.
• JLL is currently tracking three projects under construction in the Brisbane CBD (134,500 sqm), and a further one in the Near City (4,600 sqm). The combined precommitment rate across these projects is 50.8%.

Brisbane CBD records continued elevated net effective rental growth

• CBD prime net effective rents (PNER) rose 1.7% quarter-on-quarter to AUD 380 per sqm p.a. (10.8% year-on-year), as Near City PNER rose 0.3% q-o-q quarter-on-quarter to AUD 256 per sqm p.a. (10.5% year-on-year).
• Prime CBD yields remained stable in a range of 6.13%-8.25%. Yields in Brisbane’s Near City remained stable at 7.00% on the upper end but decompressed 25 basis points to 8.75% on the lower end.

Outlook: Brisbane CBD demand trajectory positive as investment value proposition gains traction

• Demand is expected to remain robust in Brisbane’s CBD over the near-term, driven by declining vacancy and increasing demand for high-quality space. Centralisation is anticipated to remain a key driver of absorption.
• Investment activity is expected to intensify over the next 12-months, supported by a favourable domestic outlook. Foreign capital interest is anticipated to increase as the value proposition begins to contend with Sydney’s CBD market.