_Rise in availability of spec office suites in Brisbane

By Knight Frank Leasing Executive Gabrielle Byrne and Knight Frank Senior Leasing Executive Liam Jurd

Availability of speculative office suites in Brisbane’s CBD office market remains at elevated levels for Q1 2024, accounting for 33,328sq m of product in the CBD market as at March this year. This rise in availability has been brought about by a proactive and positive outlook approach from Institutional and Syndicate investors capitalising on unutilised vacancy for Brisbane’s CBD, and responding to an active small-to-medium size enterprise (SME) market throughout CY23 that created demand.

Knight Frank’s latest Spec Suite Report for the Brisbane CBD found that of the speculative suite space available, 58.42% was in B-Grade buildings, while just under 13% were in premium buildings and 27.8% were in A-Grade buildings.

Thirty per cent are in the size bracket of 101sq m to 200sq m, but there are a wide range of spaces on offer from as small as 77sq m to 1,114sq m. This range of product and investment from landlords reflects confidence in the Brisbane market, with the River City leading NLA absorption nationally compared to all other major cities. 

Currently the Brisbane Market remains at a crossroad, with a subdued uptake for spec suites over Q1 2024 driven largely by a slowdown in SMEs transacting after a busy CY23 in which they preferenced the cost-effective existing fitted product - that is repurposed product or ‘second gen’ fitouts - which allows the additional incentives on offer to be allocated towards rental abatement rather than the cost to build the fitout.

However as the supply of existing fitted out space is beginning to dry up over the last few months, Knight Frank’s office leasing team envisions rising demand for speculative product that we expect will continue to strengthen for the remainder of the year.

The attraction of spec suites for occupiers remains the ease in which to occupy a new ‘turn-key’ product. The time saving element is also a driving factor, particularly with SME businesses, as it allows them to move in to a space that is ready-to-go swiftly, minimising downtime and ensuring business continuity.

Spec suites also enable businesses to reduce the risk associated with undertaking the fitout process themselves. Labour and material shortages are leading to overall construction schedules blowing out and cost rises, and occupying a ‘turn-key’ product shifts these risks and responsibilities onto the landlord. 

To further attract businesses to spec product, we are seeing landlords include particular features in these suites, such as dedicated spaces for parenting rooms, prayer and yoga/meditation. Sit-stand desks remain a preference for health and wellbeing of staff, as well as increased collaboration areas and IT, video and conferencing rooms.

A great example of speculative product completed well is at 288 Edward Street in the Brisbane CBD, owned and managed by Marquette Properties. Four tenancies have been delivered through the market leading expertise of Bearspace, Girvan Group and Growth Workplace Design. The efficient design, ensuring correct density ratios, strategic positioning of offices and meeting rooms allowing for maximum natural light penetration, functional breakout and collaboration zones as well as the neutral colour palette and high-end finishes were all factors that contributed to these suites being so well received by the market. Only one spec suite remains of the four completed to date.

Another success story is 388 Queen Street, owned by Focheong, where a ‘floor by floor’ speculative suite strategy continues to be rolled out. The 370sq m ex-Suncorp call centre floors are, one-by-one, being split three ways and speculatively fitted out. The circa 100sq m tenancies are a great entry point for SMEs looking for boutique yet high-end accommodation a stone’s throw from Eagle Street; product which is usually few and far between. To date, six tenancies over two full floors within the asset have been leased, with another three suites to be delivered by Q3 2024, of which there is already a strong interest from the market. 

For more information, please contact Gabrielle Byrne on 0434 731 093 or Liam Jurd on 0467 447 190.