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Architectus
Triplets on Mary Street, Brisbane

Q & Architecture: Brisbane’s evolving commercial office market

Senior Associate, Stephen Pratt on Brisbane’s evolving commercial office market.

You have worked on commercial projects in both Sydney and Brisbane. What are some of the similarities and differences you’ve observed between the two markets?

Brisbane is a fundamentally different market to Sydney and Melbourne in a number of ways. Sydney and Melbourne CBD office vacancy rates are between three and four per cent while Brisbane is currently over 12 per cent. With more supply in the market, face rents on office space in Brisbane are typically less than half that of equivalent space in the southern capitals. This directly affects the way that commercial projects are procured in Brisbane. Whereas in Sydney a “build it and they will come” approach often prevails, speculative developments of any significant scale are almost unheard of in Brisbane as developers seek at least 50 per cent pre-commitment prior to construction.

However, from a statutory and planning point of view, the Brisbane context is vastly more streamlined than Sydney, in particular, so approvals risk is generally a smaller concern. As a design consultant working in both the Brisbane and Sydney markets, I see a difference in focus from design competitions in Sydney – where the approval authority is a major stakeholder during a project’s early stages – to a market-led design process in Brisbane where the anchor tenant is often the key stakeholder responsible for getting large projects off the ground. While rents are lower in Brisbane, building costs are equivalent to Sydney and Melbourne so construction budgets are much more tightly constrained. As designers, this challenges us to do more with less – to seek efficient and rational solutions for the high cost items and spend money where it delivers best value.

Figure 1: Architectus and Ingenhoven Architects won the Dexus / City of Sydney design competition for 1 Bligh Street, Sydney.

The evolving commercial office market - 1 Bligh Street Sydney

Along with Melbourne and Sydney, Brisbane is one of Australia’s fastest growing cities. How is this changing the way developers think about future commercial projects?

In the next five years, Brisbane will be dramatically transformed by a number of city-shaping projects that are either already underway or close to starting. The new runway at Brisbane airport will double its capacity and make it the most efficient in the country, while Cross River Rail will link South East Queensland and unlock multiple development opportunities above and around the new stations. Looking ahead, the potential for South East Queensland to host the 2032 Olympic games will present a range of significant development opportunities

From a development point of view, I have felt sentiment in the market beginning to shift towards cautious optimism. Projects such as these have the potential to unlock a critical mass of demand that will boost growth in the region and, critically from a commercial architecture perspective, start to deliver on the promise of Brisbane as a New World City by attracting large corporate local and international tenants. This would manifest in an uptick of commercial development in the CBD and the city fringe where numerous mooted developments are seeking tenant pre-commitments. Interestingly, the premium grade office market could be under the most pressure in the short term as its current vacancy rate is around 3 per cent with minimal new supply expected and the constrained CBD grid offering few development opportunities that can yield floorplates over the key 1500 m2 threshold.

Figure 2: 100 Mount Street, North Sydney.

The evolving commercial office market - aerial view of the Sydney CBD.

Can you describe a current project you’re working on that gives a glimpse of what’s ahead for Brisbane?

In the short term, refurbishment and repositioning of existing stock will be an ongoing avenue of work for us. Brisbane has an extensive collection of early 1970s B-grade commercial office towers featuring 1000–1200 m2 floorplates, central cores and heavy precast facades. Whereas in Sydney, buildings like these are being torn down to make way for new development, the Brisbane market isn’t yet at the point where that approach is feasible. Asset owners in this market segment are instead marketing upgraded and repositioned buildings featuring new foyers, ground level retail, end-of-trip facilities and “third space” offerings. One such project, for which we are currently completing schematic design, will be the largest of its kind in Brisbane. Incorporating 3 commercial office buildings occupying an entire city block, it will feature a dramatic five storey glass atrium, extensive new foyers over 3 levels and new glazing to 3 street elevations.

At the other end of the scale, we are also working on a new 40 storey commercial office tower within QIC’s Triplets development that will leverage the new Cross River Rail station at Albert Street to deliver 35,000m2 of A-Grade NLA in the central CBD.

In parallel, we are working with institutional investors and developers to assess and unlock new development opportunities in Brisbane such as those associated with the Cross River Rail development precincts. These relationships and the insights they bring will ensure we are well placed to contribute to the next wave of growth in South East Queensland.

Figure 3: Commercial development Triplets, Mary Street, Brisbane

The evolving commercial office market - render of Triplets on Mary Street in the Brisbane CBD.

Stephen Pratt has 15 years of experience in commercial, mixed-use and residential developments. He is interested in the design of tall buildings and sophisticated facade systems. His experience encompasses successful design excellence competitions, team leadership, design development and management of complex client and stakeholder engagement through project delivery.