Office Market
FY2027 | Quarter 1
Brisbane CBD
Brisbane CBD total office vacancy as of September 2026 sits at 8.56%, up from 7.85% in August 2026. Despite the recent increase, vacancy remains well below the cycle peak of approximately 16.0% in September 2021. The increase reflects a softer leasing month and the conversion of pending vacancy into immediate availability across the market. Premium Grade vacancy increased to 8.40%, A Grade vacancy increased to 5.23%, and A-/B+ Grade vacancy increased to 9.70%. Meanwhile, B Grade vacancy increased to 14.03%, up from 13.15% in August. While tenant demand remains active, recent market movements highlight the impact of new space returning to the market and ongoing occupier preference for higher quality accommodation.
Rental growth has continued throughout 2026, particularly within Premium Grade assets. Average rents have increased significantly since 2020 and landlords continue to capitalise on strong demand for quality office space. With a lack of genuine Premium and high-quality A Grade alternatives, there remains upward pressure on rents despite the recent rise in vacancy. Recent leasing transactions across the CBD continue to establish new rental benchmarks, particularly within fitted and refurbished accommodation. This is especially evident in Premium and upper A Grade assets where competition for quality space remains strongest.
Incentives remain elevated. However, tenant demand continues to be heavily weighted towards fitted accommodation, with occupiers showing a strong preference for move-in ready space. This trend continues to support well-presented assets with existing fit outs and limits demand for unfitted accommodation. While Brisbane’s office market appears to be transitioning into a more balanced phase following the strong leasing conditions experienced between 2021 and 2025, market fundamentals remain favourable. Therefore, further rental growth is anticipated, particularly within Premium Grade assets where vacancy remains relatively constrained and tenant demand continues to focus on quality accommodation.
An increasing volume of office assets are being brought to market as fund managers look to recycle capital and divest their holdings, resulting in elevated levels of available investment stock available for purchase. Despite this, buyer demand remains subdued due to challenging macroeconomic conditions, including higher interest rates, constrained liquidity and increased financing costs. This imbalance between supply and demand has led to a widening bid to sell spread, with vendors reluctant to meet current market pricing expectations.
Consequently, a growing number of sales campaigns are being withdrawn following marketing processes often due to, limited buyer engagement, unsuccessful capital raising efforts or failure to achieve acceptable pricing outcomes. The combination of elevated supply, weaker demand and transaction uncertainty suggests softening market conditions and downward pressure on asset values. (Caden Vacancy Tracker August and September 2026).
Brisbane Fringe
Total Brisbane Fringe vacancy increased from 11.4% in March 2026 to 11.6% in September 2026. This reflects a modest softening in market conditions, despite an improvement in leasing demand across several key precincts. This coincided with six-month net absorption of approximately -3,327 sqm, which, while remaining negative, represents a notable improvement from -15,824 sqm of the previous six-month period. Despite this, vacancy remains relatively contained. Ongoing demand for higher-quality accommodation and a lack of new supply have continued to support market fundamentals.
Milton vacancy has tightened to from 14.1% to 13.4% in September 2026. This remains below the long-term average of 15% and is broadly comparable to Brisbane CBD secondary and B-grade vacancy levels. The precinct continues to attract value-driven tenants due to its affordability, connectivity and access to quality accommodation outside the CBD. Demand continues to favour well-located, higher-quality assets, with the ongoing flight-to-quality trend supporting tenant interest across major Fringe precincts.
Rents in Milton have continued to strengthen over the past 12 months, with A Grade net effective rents increasing by approximately 6.0% year-on-year. As at September 2026. This growth has been supported by limited new supply and sustained occupier demand for quality accommodation. Incentives have also begun to tighten, reflecting improving landlord conditions across the Fringe office market (Cushman and Wakefield – Marketbeat Brisbane Fringe Office, Q3 2026).
Notable sales within the Milton office market include:
- 29 Finchley Street, Milton sold in April 2026 for $5.36 million (VP)
- 16 Marie Street, Milton sold in November 2025 for $19.7 million (8.9% Yield)
- 339 Coronation Drive, Milton sold in October 2025 for $80 million (9.13% Yield)
Mackay
The Mackay office market has remained stable in terms of investment yields throughout 2026. Rental growth has continued steadily, with office rentals expected to increase by approximately 5% in the near term before stabilising. This growth is supported by ongoing demand from both owner-occupiers and investors, with yields expected to remain stable throughout the year, underpinning confidence in the market (HTW MIR April 2026).
Notable sales within regional Queensland include:
- 19-49 Stanley Street, Townsville sold in June 2026 for $13.75 million (9.04% yield)
- 110 Wood Street, Mackay sold in December 2025 for $8.08 million (8.25% yield)
- 36 Wood Street, Mackay sold in February 2025 for $4.2 million (7.97% yield)
