Health and IT to change face of Brisbane office market
Vacancy levels in the Brisbane CBD are predicted to peak at 19% this year, but industry commentators are confident growing demand from the healthcare and IT industries will counteract any further rise.
CBRE Australian head of research Stephen McNabb says demand from healthcare and IT will help to redefine the tenancy mix in the Brisbane office market, in addition to a return to normal growth in government, business and financial services.
“Health is forecast to be the second fastest growing industry in the Australian economy over the next five to 10 years,” he says.
Small business: Little guys lead office demand growth
CBRE Brisbane office services manager Michael Skarparis agrees that the medical and IT sectors are emerging as the two biggest growth industries in Brisbane’s office market.
“With an ageing population, medical services providers and suppliers are driving organic growth and office absorption in the market.”
“They’re taking space everywhere – we’re not just seeing them lease space in one specific location, they’re driving demand in pockets across the city fringe market and this will only continue to gain momentum.”
Skarparis says although still a relatively small component of the tenancy mix in Brisbane’s office market, the IT and technology sector is one of the fastest growing industries and will become a major occupier in the Brisbane market.
“The state and federal governments are really putting an emphasis on funding and creating incubator or co-working environments for entrepreneurs to really thrive in, which is further driving demand in the character market,” he says.
From an investment perspective, CBRE Brisbane metropolitan investments director Peter Court says Brisbane is also benefitting from unprecedented levels of offshore investment on the eastern seaboard, with priced out buyers seeking more attractive yields interstate.
Health is forecast to be the second fastest growing industry in the Australian economy over the next five to 10 years
“While there has been a retraction of offshore interest in Brisbane, we’re seeing a flow on effect from the record volumes of foreign buyers entering the Melbourne and Sydney markets.”
“Most of the interest is coming from interstate, with well leased assets continuing to be the most sought after from both private and institutional groups.”
Commenting on opportunities for investment return in Brisbane, Court says the near city market is positioned for growth.
“We’ve hit the cyclical point of vacancy in the near city market, with vacancy trending down and providing scope for rental growth.”