Major flex space companies expand into Brisbane: Colliers International

The Brisbane office market remains a target for the global flexible workspace operators with the city already recording approximately 16,000 sqm of commitments across CBD and metro regions in the first half this year., according to Colliers International.

“Major players in this space such as IWG and WeWork are expanding within Brisbane as the competitive rents allow them to make a bigger footprint for less capital expenditure,” said Nick Davies, Associate Director of Tenant Advisory at Colliers International."

“We are also an attractive location given the large number of small businesses operating in Queensland as well as a substantial amount of project related requirements from Engineering and Resources sector."

“Colliers International is forecasting flexible workspace operators to take up approximately 28,250sqm of space in the CBD this year. There are reports of operators that are in the process of negotiating new locations across the CBD and as well as metro locations."

“Despite the lack of available large scale contiguous space, flexible workspace operators are still expected to contribute to the reduction of the city’s vacancy rate through 2019 and well into 2020."

“With a substantial number of new office developments which have been approved or looking for pre-commitment, operators will be looking to take pre-commitment for this space that is due for completion around the late 2021 to late 2022, such as Midtown Centre, 80 Ann Street and 360 Queen Street just to name a few."

“Fortitude Valley has several new projects that are seeking pre-commitment and landlords are willing to provide highly favourable deal terms to secure long-term tenants,” said Mr Davies. 

Simon van Grootel, Development Director Australia at IWG said they are seeing a huge rise in demand for larger scale solutions from 50 – 500 work stations coming through weekly across the country.

“These are forming part of a national strategy for many of our corporate customers who not only value the national and global network we provide, but also need the scale across multiple locations to quickly satisfy the frequent spikes and subsequent reductions in head count space. 

“With Brisbane a key growth city that has matured significantly over the past 5 years, we anticipate that more companies will grow their presence here driven by strong migration and a skilled labour force. Our Spaces brand which is larger footprint offering, demonstrates our confidence in this with new centres opening in Melbourne, Perth and Sydney in the next 6 months with further announcements coming soon.”  

As per Colliers International research statistics collated in February 2019 Brisbane is the Australian capital city with the largest percentage of flexible workspace occupancy of CBD stock at 2.8%.

There are 32 flexible workplace centres across Brisbane CBD totalling 63,104sqm with the average desk cost of $550 per month. 

Brisbane has reached its lowest vacancy in five years, with flexible workspace operators directly contributing to the take up in space.

Flexible workspace transactions have a significant impact on the reported vacancy rate as they account for pure absorption and are not typically leaving behind older tenancies.