“There has been noticeably higher tenant activity across the fringe during 2018, with negotiated leases for spaces of 1000sq m or above dominated by tenants in the engineering and IT sectors,” Knight Frank partner Andrew Carlton said.
“While the CBD is set to remain a strong competitor for larger tenants, the fringe market has regained traction in the past six to nine months.”
As Queensland’s economy continues to strengthen, solid employment forecasts, upside for commodity and energy-related industries, and competitive deals on offer in quality fringe accommodation are boosting the state’s net absorption levels.
Brisbane’s broad infrastructure pipeline, which includes the $3 billion Queen’s Wharf Project, Howard Smith Wharves, the new Brisbane Airport Redevelopment, the $5.4 billion Cross River Rail, and Brisbane Quarter, is also playing a large part in the city’s improving employment base.
“With little imminent supply and the rebalancing of demand between the CBD and fringe, rental growth will be sustained, ranging between 3.7 per cent and 4.5 per cent year on year for the next three years,” Knight Frank partner Jennelle Wilson said.
The Knight Frank report found the city’s Inner South remains the precinct with the lowest vacancy rate at 8.6 per cent, while the Urban Renewal precinct has seen the greatest activity.
Milton has seen a great improvement, with the availability of modern, refurbished accommodation, particularly at Milton Green, spurring activity.