2025-12-18-莱坊-Brisbane_Fringe_State_of_the_Market_December_2025_8页_1mb

Brisbane Fringe Office Market Summary

Core Content

The Brisbane Fringe Office Market has shown resilience in 2025, with investment volumes increasing and rental growth driven by high-quality assets. Despite limited new supply and a decline in secondary market absorption, the overall market remains positive, supported by strong demand for prime space and a continued focus on quality, amenity, and ESG (Environmental, Social, Governance) standards.

Key Market Indicators

• Total Vacancy: Fell to 10.5% in July 2025, down from 12.0% a year earlier.
• Net Absorption (FY2025): 15,963 sqm, with prime space absorbing 21,031 sqm and secondary space recording -5,068 sqm.
• Net Additions (FY2025): -4,518 sqm, with no new buildings under construction.
• Prime Gross Face Rent Growth (p.a. to Oct-25): 8.8%, with an average of $752/sqm.
• Prime Median Yield: 7.95%, stable for a year, with a firming bias expected into 2026.
• Secondary Gross Face Rent Growth (p.a. to Oct-25): 8.1%, with an average of $584/sqm.
• Prime Incentive %: 39.5%, down from 41.5% in the previous year.

Market Trends

Positive Absorption, Slower Momentum

• The market recorded positive net absorption of 1,409 sqm in the six months to July 2025, with 15,963 sqm absorbed over the year.
• Prime absorption remained strong, with 9,462 sqm in H1-25 and 21,031 sqm over the year.
• Secondary absorption weakened, with -8,053 sqm in H1-25 and -5,068 sqm over the year.
• The Urban Renewal precinct led the way with positive absorption of 10,031 sqm over the year, while Inner South also showed gains. Milton, Spring Hill, and Toowong had negative net absorption.

Vacancy Trends

• Prime Vacancy: Tightened to 8.3% in July 2025, down from 9.7% in January 2025 and 11.3% a year earlier.
• Secondary Vacancy: Increased, with B Grade rising to 13.4% and C Grade to 12.8%.
• Total Vacancy Decline: Concentrated in Urban Renewal and Inner South, with Toowong maintaining the lowest vacancy at 6.4%.
• Prime vacancy faces potential volatility due to large tenants moving to the CBD, such as BOQ and CIMIC.

Rental Growth

• Prime face rents have grown significantly, with the top of the market reaching $825–850/sqm.
• The gap between A-grade CBD rents ($960/sqm) and prime fringe rents remains at 28%, with CBD space often cheaper than new Fringe developments.
• Secondary rents have also appreciated, though from a low base, reaching $584/sqm.

Investment Activity

• Investment Volumes: Increased, with $493 million in sales recorded in the near city market as of November 2025.
• Investor Interest: Renewed appetite for quality assets, supported by lower debt costs and improved sentiment.
• Transaction Examples:
  • 515 St Pauls Tce, Fortitude Valley: Sold for $174.85 million.
  • 505 St Pauls Tce, Fortitude Valley: Sold for $132.01 million.
  • 339 Coronation Dr, Milton: Sold for $80 million.
• Yield Stability: Prime yields remain stable at 7.95%, with a firming bias expected into 2026 due to increased buyer competition.

Supply Constraints

• No New Office Completions: The last major addition was 895 Ann Street in H2 2023.
• Supply Reduction: Continued withdrawals of older assets, such as 30 Little Cribb Street in Milton, have reduced total stock by 1.2% over two years.
• Development Delays: Feasibility challenges, including rising costs and extended timelines, have stalled new projects.
• Residential Focus: Developers are shifting focus to residential and alternative investments, limiting new office supply.
• Future Supply: New office developments are not expected until at least 2028, with no significant projects under construction.

Major Occupiers and Sales

• Large Occupiers:
  • Youi: Seeking 15,000–20,000 sqm of A-grade space by 2026.
  • Energy Queensland: Looking for 16,000–18,000 sqm of premium or A-grade space by 2030.
  • AFP: Brief for 8,000–10,000 sqm of high security A or B-grade space by 2029.
• Recent Sales:
  • 515 St Pauls Tce, Fortitude Valley: $174.85 million.
  • 505 St Pauls Tce, Fortitude Valley: $132.01 million.
  • 339 Coronation Dr, Milton: $80 million.
  • 23 Graham St, Milton: $21 million.
  • 49 Park Rd, Milton: $19 million.

Conclusion

The Brisbane Fringe Office Market remains a strong and attractive investment opportunity, with continued rental growth, stable yields, and positive net absorption. However, the market is constrained by limited new supply and a shift in developer focus toward residential projects. The flight to quality is evident, with prime space in high-demand precincts like Urban Renewal and Inner South leading the absorption trend, while secondary space faces increasing vacancy. Despite the potential for volatility due to tenant movements into the CBD, the market is expected to maintain its resilience and attract investment through 2026.