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Brisbane’s flexible office market is on the rebound, thanks to an increasing interest in flexible workspace solutions in the post-pandemic era.
Demand for flexible office space in the Queensland capital was up by 8 per cent in 2022 when compared to 2019, according to data from global workspace innovation firm The Instant Group.
Upon analysing the demand, rates and supply for the Greater Brisbane area, findings revealed activity and occupancy in the city has “recovered well” since the pandemic, driven largely by the trend of bigger companies and multinationals shifting from traditional leasing models to flexible ones.
However, when compared to 2021, overall demand for flexible office space witnessed a 1 per cent drop annually.
Jordan Cui, the associate director for The Instant Group, said the fluctuation in demand for flexible workspaces in the city observed last year was due to uncertain market conditions caused by COVID-19.
“Some businesses reduced their footprint, while others sought out flexible workspace solutions. This resulted in a volatile market with changing demands and preferences,” he explained.
But Mr Cui highlighted that activity is picking up in the sector, with demand rising and supply increasing on the fringes.
Data showed a 14 per cent growth of new flexible space supply within Brisbane in 2022 when compared to pre-pandemic levels, while rates for workstations increased by 8 per cent in 2022 compared to 2021.
The firm attributed the increases to inflationary pressures, which have resulted in many operators increasing their prices.
Notably, there has been an observed shift in preferences for office spaces in the post-pandemic era.
In February, Dwight Hillier, Colliers’ managing director of valuation and advisory services, noted the current trend of investors favouring high-quality properties will continue to affect the office and retail markets and further deepen the already-existing divide between premium and secondary assets.
“The opportunity presented by premium and A-grade office assets will increase at the end of next year as investor appetite grows in alignment with occupier preferences post-pandemic, ensuring yields remain resilient,” the expert stated.
A recent report by global real estate firm JLL also showed the rise of hybrid work models is driving demand for smart office spaces.
“As employees adapt to the post-pandemic world and office usage patterns continue to evolve, the office is being reimagined for new purposes. A new vision of the agile, smart office and CRE portfolio is taking shape, supported by dynamic workplace services aligned with today’s employee needs,” the report stated.
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