Business

Brisbane office vacancy rates improve, despite addition of 1 William Street

Brisbane's record office vacancy rates have improved, despite the introduction of major new commercial buildings in the CBD, a Property Council of Australia report has found.

The city's vacancy rate dropped from a record 16.9 per cent to 15.3 per cent in the past six months but still performed worse than a year ago, when the rate was 14.9 per cent.

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Inside the Tower of Power

A tour inside the "very open plan" One William Street, which will be home to 5,000 Queensland public servants.

That improvement was despite the opening of 1 William Street – the so-called "Tower of Power" or, more colloquially among some of its inhabitants, "One Big Willy" – towards the end of 2016.

PCA Queensland executive director Chris Mountford said while it was the best improvement of any capital city CBD in Australia, it did not mean Brisbane was performing particularly well when compared with southern capitals.

The Queensland capital still lagged behind Sydney (6.2 per cent), Melbourne (6.4 per cent), Hobart (8.2 per cent) and Canberra (12.6 per cent).

The Brisbane office market did, however, perform better than Perth (22.5 per cent) and Adelaide (16.2 per cent).

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"Brisbane is still in the bottom half of the pack when it comes to CBD vacancy rates," Mr Mountford said.

"While there has been some office buildings withdrawn from the market for redevelopment, new demand is also playing a big role in bringing down the vacancy rate.

 "Demand for office space in the Brisbane CBD is now more than five times higher than historical levels."

The Brisbane fringe market, in suburbs neighbouring the CBD, had a slight drop in vacancy rates, from 12.9 to 12.6 per cent. 

"While it is positive to see demand and withdrawals keeping pace with new supply over 2016, Queensland is still experiencing historically high office vacancy," Mr Mountford said.

"In this critical election year, it is imperative that the state government works to boost business confidence to invest and create jobs in Queensland."

The PCA report noted 57,676 square metres of office space was withdrawn from the market.

Mr Mountford said that was largely the result of the old Executive Building, the Neville Bonner Building and 80 George Street being vacated to make way for the Queen's Wharf development.

At the same time, 75,853 square metres were added to the market, most notably in William Street.

The report also noted there was "no (additional) space in the pipeline" from 2018 in the medium term.

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