A U S T R A L I A C O V E R E D

QUEENSLAND
The Queensland economy continues to undergo
a transition away from the resource sector
more towards broad based growth.
At the same time the Brisbane office market is struggling with a difficult combination
of historically high vacancy combined with a large development pipeline. Brisbane
is currently undergoing a cycle of re-generation with some of its largest ever projects
currently planned or underway. With every $1 million invested in construction
estimated to result in $3 million created for the domestic economy, the sheer
volume of major construction projects and upgrades should generate thousands
of jobs for Queensland.
Tenants are taking advantage of the current soft leasing market and are choosing
to upgrade their office space at highly attractive rents. This is leaving behind vacant
secondary space – JLL has identified up to 194,000 sqm (equivalent to 9% of stock)
which could be withdrawn over the next five years for conversion, refurbishment
or demolition.
While mining will remain important to the Brisbane office market we may be about
to witness a broader based recovery driven by professional services, education
and construction, as well as secondary jobs from tourism growth.
It should be noted that while demand may have turned a corner, Brisbane’s office
supply pipeline remains strong and it may be some time before any improvement
in demand translates to falling vacancy and substantial rental growth.
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