Brisbane metro office market heating up: Colliers International

There was a record $533 million of metropolitan Brisbane office transactions in the first half of this year, according to Colliers International.

Colliers’ Competitive Rivalry: Office Versus Residential in Metro Markets report found foreign investors re-emerging over the first half of the year and acquiring $254 million worth of assets.

For instance, Southpoint was purchased for $200.6 million by Union Investment Real Estate.

There were a total of 11 sales during the period, with two foreign companies acquiring the biggest assets, explained director of capital markets for Colliers, Jason Lynch.

“Domestic buyer groups comprised REITS and unlisted institutions which bought up $205 million worth of metro office assets, with the remainder being private investors and property groups,” Lynch said.

“In the last three months there has been an increased amount of Asian investor interest looking to reweight their capital into our CBD and metro markets. A Grade assets, particularly those with long lease terms and good quality tenants are highly sought after.”

But he notes that the issue facing investors at present is a lack of supply.

“The feasibility of developing new large office developments is diminishing due to increasing land values driven primarily by the improved residential apartment market and the CBD’s competitive position with respect to rents and incentives,” he said.

Despite this, forecasts are steady for the Brisbane market.

Source: Colliers International