Brisbane CBD office vacancy rate has edged higher and there are expectations it will rise the impact of the pandemic lockdown bites

With some major businesses already moving out of their Brisbane CBD offices into smaller spaces, there are fears vacancy rates will start to skyrocket. SEE WHO IS ALREADY ON THE MOVE While there are increasing signs of life in the CBD, thousands of workers are still working from home or on forced leave and a growing number made redundant and businesses have to grapple with excess space. According to industry sources insurers Allianz at 310 Ann Street are downsizing and will sub lease two floors while St George has moved out of a full floor at Waterfront Place and moved in with parent company Westpac at the Riverside Centre. There are expectations more will be forced to give up space. According to the latest research by property agency JLL the Brisbane CBD recorded a negative net absorption of -15,700sq m in the second quarter of this year, This has increased the headline vacancy rate increased by 0.7 percentage points to 12.8 per cent. JLL head of leasing Queensland Adam Barratt said this could be the beginning of a general rise in the office vacancy rate. “There is certainly a negative vibe about,” he said. “The true effect of this pandemic won’t be known from an office leasing perspective for at least six to 12 months when tenants will be able to really assess where their businesses fit financially. “Hopefully it will turn quickly but businesses are not making decisions and when they do it will probably be on the downside.” According to JLL all six of the monitored CBD office markets recorded negative net absorption in the second quarter of the year. Across Australia there was a negative net absorption of -147,600sq m which ensured the national CBD office market vacancy rate rise by 1.8 percentage points from 8.4 per cent to 10.2 per cent. JLL head of research – Australia, Andrew Ballantyne said the past 12 weeks have been unprecedented for the Australian office sector. “Headcount reductions have been concentrated in the hospitality, retail, arts and recreation and construction sectors, but traditional office using industry sectors have not been immune,” he said. “Policy measures have provided downside protection to the economy and the reopening of the economy has occurred well ahead of expectations. “However, many organisations will struggle to find a pathway back to pre-crisis revenue levels and this will have an impact on office sector demand.”