Commonly known as the logical location for expansion of the Brisbane CBD, it may come as no surprise that Fortitude Valley is currently experiencing a tidal wave of commercial office developments.
This new supply, coupled with a recent spike in fully fitted sub-lease space due to the impact of COVID related issues, has meant the Urban Renewal Precinct has a plethora of full-floor vacancies.
There are currently as many as five new build projects either currently for lease pre-commitment or under construction in the area, including:
These projects total 86,500sqm, and when put into perspective, will increase that market by a total of ~30% once complete.
All of these new build commercial projects, except for 388 Brunswick Street, will have contiguous >1,500sqm floor plates that are highly appealing to larger corporate occupiers. Data uncovered by the Gensler Research Institute found that staff productivity is optimised on larger floor plates as they have physical connections with co-workers and more opportunities to interact.
In addition to this, indoor-outdoor transitions can also improve staff efficiency and productivity. From a design and people perspective, this size offering has an increased appeal to larger occupiers.
Outside of the lure of the design and productivity benefits, these new build projects are offering far more aggressive and appealing financials, meaning there is a “flight to quality” theme occurring in our market. This is where tenants relocate from lower to better quality buildings at similar financials. So, how are owners of lower quality buildings with significant vacancy leasing their properties?
Fortunately, the solution is simple, and all that is required is to adopt a subdivision strategy to cater for the most active segment in our Brisbane fringe market; being brokerage sized tenants. Projects that have shown great success in their sub-division strategy include:
In many cases, this strategy yields higher gross face rents, lower vacancy period and a smaller incentive for tenants. The key to this is recycling or cosmetically upgrading existing fit-out to appeal to these sized tenants.
Within Fortitude Valley, there is currently a lack of good quality fitted space in vacancies sized <500sqm. Recent transaction evidence has found that 75% of deals within this size bracket have either had a brand new speculatively constructed fit-out or a refurbished existing fit-out. This is because many tenants within this size bracket typically leave the search to the last ~six months prior to expiry. This means there isn’t enough time to design and construct a fit-out from scratch, ultimately steering them toward tenancies with a fit-out.
“Urban has built a business around constructing speculative fit-outs for owners and has a lot of repeat customers. Over the last 18-24 months, we have seen a lot of owners of larger full-floor vacancies come to us for advice around the best way to present their smaller vacancies.
On a very basic level, our display suites generally capture a front of house, some meeting rooms or multi-purpose rooms, workstations and a feature/formal breakout space.
We are regularly told from tenants that are generally <500swm they find the relocation process much simpler if the fit-out is already exiting.”
- Matthew Hills, Project Manager, Urban Group.
Commercial Property For Lease in Fortitude Valley
51 Alfred Street, Fortitude Valley
Area: 200m2 - 600m2
One of the most conveniently located office accommodations in Fortitude Valley, this A-grade property offers nothing less than a "work, live, play” lifestyle opportunity.
Located opposite the train station, Valley Metro and Secure car park, it offers easy access to transport and the surrounding retail and entertainment precincts.
25 King Street, Bowen Hills
Area: 500m2 - 1500m2
Platinum Well Certified with 6 Star Green Star Rating & a 6-star NABERS Energy rating, this property is one of Fortitude Valley’s best quality buildings.
With a statement design crafted from engineered timber, premium end of trip facilities, and close access to King Street amenities, bars, and eateries, this location is putting Fortitude Valley on the map.
HQ North Tower, 540 Wickham Street, Fortitude Valley
Area: 600m2 - 2887m2
At 550m2 to 2,887m2, HQ North Tower offers the largest A-grade office floors in the Valley.
With modern End of Trip facilities, the 11-storey tower is surrounded by retail and residential developments. This commercial space allows easy access to public transportation and the Inner City Bypass.
The abundance of ground floor food and beverage options and the proximity to James Street, Emporium, King Street, and Valley Metro Train Station make the HQ North Tower a first-choice office space.