In Q2 2025, the Brisbane CBD office market demonstrated resilience and selective strength. Vacancy remained moderate, rental growth continued in prime-grade assets, and investor interest focused on high-quality buildings. Supply constraints and tenant preference for well-located offices are continuing to shape market dynamics.
Economic overview
The Reserve Bank of Australia cut interest rates in May 2025 for the second time this year, shifting its focus from containing inflation to supporting economic growth and maintaining employment. Queensland’s economy is expected to expand at a faster pace than most other states, benefiting from rising consumer confidence and improving business sentiment.
Key economic indicators include:
- Gross State Product (GSP): +2.1% in 2025, +2.7% in 2026
- GDP growth (Q1 2025): 0.5% quarterly, 1.3% year-on-year
- GDP forecast: 1.8% by end-2025, 2.1% in 2026.
These conditions are supporting occupier activity and investor confidence in the Brisbane office market.
Demand
Tenant activity remains concentrated on high-quality, prime-grade buildings, reinforcing the ongoing flight-to-quality trend.
Net absorption over the past six months was slightly negative at ‑12,646 sqm, following strong leasing activity in the latter half of 2024. Several pre-committed supply projects, including 205 North Quay, are scheduled for completion later in 2025, which is expected to drive tenant movement, particularly among larger occupiers seeking modern, efficient space.
Increase in demand is also driven by the upcoming Olympics and the perceived growth benefit from that event.
Overall, demand continues to favour well-located, high-quality buildings, and leasing momentum is likely to pick up in the second half of the year.
Rents and incentives
Rental growth remains strongest in the prime-grade segment, with secondary assets also showing improvement, though at a slower pace. Tight vacancy and limited supply are contributing to upward pressure on rents.
Key figures for Q2 2025:
- Prime-grade assets:
- Net effective rents: AUD $448 per sqm per annum (+22.6% YoY)
- Incentives: 35.1%, down from 38.2% in 2024
- Secondary-grade assets:
- Net effective rents: AUD $289 per sqm per annum (+15.3% YoY)
- Incentives: 39.5%, stable from late 2024
The scarcity of high-quality space is driving competition among tenants, with landlords moderating incentives as vacancy tightens.
Future outlook for the Brisbane office market
Looking ahead, the Brisbane CBD office market is expected to continue a measured recovery. New prime-grade supply coming online later in 2025 may temporarily lift vacancy, but pre-committed projects and sustained demand for quality space should absorb most of this additional capacity.
- Prime-grade assets are likely to see continued rental growth and strong investor demand.
- Secondary-grade assets may face ongoing challenges, including softer rental growth and higher incentives, unless repositioned or upgraded.
- Overall, the market is poised for cautious optimism, balancing a stable economic backdrop, selective tenant demand, and limited new supply of premium space.
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