A recent CBRE analysis has revealed that around 55,000-square metres of office stock will be withdrawn from Brisbane's inner-city market over the next two years as the city's apartment boom gathers pace.
The withdrawals primarily relate to older 'B' and 'C' Grade buildings, which are being demolished to make way for new residential projects.
CBRE Office Services Senior Negotiator Mel Pikos said the high level of withdrawals would have positive spin-offs for near city landlords as displaced tenants searched for new leasing opportunities.
"We expect the volume of stock being withdrawn will only increase as office owners who have experienced significant lease-up timeframes look for alternative exit strategies," Mr Pikos said.
Many of the withdrawals have been ageing office buildings now earmarked for residential development.
According to CBRE, this has been fuelled by particularly strong interest from Asian developers who have acquired more than $370 million in sites across Brisbane within the last 12 months.
CBRE's analysis highlights that 12 office buildings will be withdrawn from the market by 2016, with all but two targeted for residential development.
"The large amount of space withdrawn from the market could account for a further positive take-up of 20,000sqm of currently vacant space from occupiers looking to re-locate in a tighter market place," Mr Pikos said.
A number of tenants have already taken the opportunity to upgrade their office accommodation and move from soon-to-be developed buildings with the Australian Federal Police vacating their Wharf Street office for a new space on Commercial Road, Newstead.
Similarly, Elders Insurance is moving from its Merivale Street address to Melbourne Street, South Brisbane.
"These examples reveal the increasing trend for businesses to relocate in near city regions in order to benefit from the facilities of new 'A' Grade buildings," Mr Pikos said.
Another positive for the market will be the limited pipeline of new office stock.
"This limited and largely committed development pipeline, coupled with the high number of 'B' and 'C' grade buildings being withdrawn from the market, should ensure that net absorption levels in the near city market continue to improve in the short to medium term," Mr Pikos said.
Building withdrawals for 2015 and 2016 according the CBRE's analysis:
2015
109 Melbourne Street, South Brisbane
183 Wharf Street, Spring Hill
611 Coronation Drive, Toowong
2016
152 Wharf Street, Spring Hill
207 Wharf Street, Spring Hill
25 Donkin Street, South Brisbane
57 Old Cleveland Road, Greenslopes
435 St Pauls Terrace, Fortitude Valley
