The Brisbane CBD office market is an entrepreneurs dream – if you are a developer and not looking to lease. Major office blocks are changing hands at record prices and rents are the highest in Australia. But office vacancies have sunk to less than half a percent a year, The Australian Financial Review reports this morning.
Rents are over $1000 per square metre and yields in the 5% range. One agent described the rent growth as extraordinary at 58%, while for the 12 months to September it was 76%.
The rent increases have come on the back of a 32% increase in rental growth in 2006 and 20% in 2004 and 2005.
Agents say 2007 has been one of the biggest on record. There are a lot of new buildings on the drawing board, so Brisbane could be looking at an oversupply.
But so far there is little under construction; just a lot of people with development applications. Meanwhile there are still a lot of large buildings about to be sold, and given the cashed-up punters who have benefited from the recourses boom, there should be no shortage of buyers.