Net absorption of office space within the underarmourshoes Brisbane near City markets has been largely above trend levels over the past two years as the increased demand in the CBD and general office market also had an impact on the Near City.
Based on external forecasts of white collar employment growth, we are anticipating average annual net absorption within the Brisbane Near City to be just over 34, 000m² for the next three years. This level is supported by the expectation that some larger CBD tenants will relocate to new developments in the Near City precincts during 2007 and into 2008.
The vacancy rate within the Near City, similar to the CBD, is at historically low levels,underarmourshoes recording 4.2% as at the July 2006 PCA survey. “A grade” accommodation has all but disappeared with 0.8% vacancy as at the PCA survey in July 2006.
This is reflective of tenants from the CBD moving to the fringes, but expecting a high quality of accommodation in return for any perceived compromises made on staff amenity.
In terms of the precincts, Spring Hill with 2.3% (also a beneficiary of the CBD market tightness), Toowoon with 3.2% and the Inner South with 3.6% are tightest Near City markets. The Milton market at 4.1%, although not the tightest market at the moment, is the precinct with the greatest recent improvement, down from a 7% vacancy in January 2006 and showing speedy recovery from a recent high of 16.2% in January 2004.
As the Latin American economies mature, foreign capital investment will increase, requiring further development of infrastructure, and in turn making investment in industrial real estate more attractive.