Businesses race for A-grade space

BRISBANE: Premium office space in the CBD is in high demand as the market bounces back from a tumultuous 2009.

Brisbane real estate experts say the once notoriously tight market with booming rents suffered a “reality check” during the global financial crisis but has stabilised and confidence has returned.

Daniel Boman, research manager for property advisers and agents DTZ, said as the economic recovery had taken off, businesses had been snapping up A-grade office space.

Mr Boman said the vacancy rate for A-grade space in July was 14.3 per cent but in January it had shifted to 9.6 per cent.

“It’s a fight for quality that comes from a feeling they are not going to fall on their heads and the economy stabilises,” he said.

“Over the next 12 months I expect vacancies will tighten and A-grade vacancies will tighten by the middle of the year to about the 8s.”

Mr Boman said the growth in premium space had come at the expense of B-grade space and business changes had resulted in higher-than-normal rates of subletting.

Jones Lang LaSalle office leasing national director Mark Curtain said after receiving a “reality check” during the fallout of the GFC, demand was picking up.

“We had some fairly significant movement downwards in Brisbane rents, though it needed to be adjusted,” he said.

He said rents dropped about 30 per cent.

Global property adviser Savills found while the Brisbane market had taken a hit, it had witnessed a considerable rebound in the latter part of 2009.

Queensland office leasing divisional director Stuart Moody said: “In January alone, we saw two multinationals take 1400sq m each within a week of inspecting.

“With the current level of interest, we feel very positive about 2010.”

Source: whereilive