CBRE

FIGURES|BRISBANECBDOFFICE|Q32025

Totalvacancyrises,althoughprimestable

10.7%

VacancyRateinJuly25

Note:Arrowsindicatechangefrompreviousquarter/year.

+9.5%

PrimeNetEffectiveRentGrowth(y-o-y)

27,473sqm

NetAbsorptioninH12025

7.06%

PrimeYield

FIGURE1:TotalCBDVacancy

BrisbaneCBD

July2024

January2025

July2025

H-o-H

Change

Y-o-YChange

Vacancy

9.5%

10.2%

10.7%

+50bps

+120bps

KeyPoints

-EconomicgrowthsolidinQueenslandoffthebackofimprovedhouseholdspendingandinfrastructureinvestment.

FIGURE1:SummaryofPrimeCBDMarketIndicators

-Supplypipelineunchanged,with360QueenStreetdueforcompletionbytheendof2025.

BrisbaneCBD

Q32023

Q32024

Q32025

Q-o-Q

Change

Y-o-YChange

GFR

$916/sqm

$994/sqm

$1,060sqm

+2.3%

+6.7%

Incentives

40.7%

39.9%

39.5%

0bps

-36bps

NER

$360/sqm

$408/sqm

$446/sqm

+2.9%

+9.5%

Yield

6.25%

6.83%

7.06%

0bps

+23bps

-Netabsorptionwasstrongat27,473sqm,leadingallCBDmarketsinAustralia

-Totalvacancyincreasesslightlyto10.7%,primevacancystableat8.0%

-Primeeffectiverentalgrowthincreasedby2.9%q-o-qand9.5%y-o-y,giventhetightoccupiermarket.

-TherewasonetransactionintheCBDinQ3,being63GeorgeStreetfor$52million.

-Officeprimeyieldswerestableforthequarter,averaging7.06%

Source:CBREResearch,PCA

1CBRERESEARCH?2025CBRE,INC.

FIGURES|BrisbaneCBDOffice|Q32025

2CBRERESEARCH?2025CBRE,INC.

EconomicOverview

QLDEconomyinsolidpositiondespiteglobalheadwinds

Despiteglobaluncertainty,theQueenslandeconomyhasdemonstratedresilienceoflate.Populationgrowthhasbeenasignificantdriveroverthepastfewyears.TheGovernmentcontinuestoinvestinkeyinfrastructureacrossthestate,withasolidpipelineasprojectsfortheOlympicsyettobegin.Inaddition,theweakerAustraliandollarisbenefitingkeyexportsectors,includingtourism,mining,andeducation.

InQ22025,Queensland'sStateFinalDemandincreasedby0.7%q-o-qand2.4%y-o-y.Thegrowthhasbeenprettyconsistentthelastfewquarters.Improvedhouseholdconsumptionhasbeenakeyfactorforthegrowth,whichisdrivenbyacombinationofpopulationgrowthandimprovedspendingpoweroffthebackofrecentinterestratecuts.Businessinvestmenthasslightlyimprovedoverthepast12months,whilepublicsectorspendinggrowthremainselevatedat+3.3%y-o-y.

TheunemploymentrateinQueenslandremainstightat4.4%asofAugust2025.However,therehasbeensomeevidenceofslowerhiring,withemployedpeopleinQLDdroppingby0.7%overthepastthreemonths.Thismightjustbeashort-termfactor,yettherehasbeensomesofteningatthe

nationallevelaswell.

FIGURES|BrisbaneCBDOffice|Q32025

3CBRERESEARCH?2025CBRE,INC.

OfficeDemand

Leasingactivityappearstobegainingmomentum

Leasingactivitywasslowatthestartof2025inBrisbane.However,thereappearstobesomeimprovedmomentumastheyearprogresses.Interestingly,thelargerendofthemarketappearstobemoreactivewithanumberoflargedealsatheadsofagreementstage.Thesmallertenantactivityhasbeenmoreofaconcernoverthepast18months.Thesetenantswereveryactivein2021-23,yettherehasbeenanoticeabledeclineofrelocationsfromsub-1,000sqmtenants,astheyaretypicallyrenewinginthecurrentenvironment.Despitethis,therehasbeenquiteafewexamplesoftenantexpansionwithintheirexistingpremises.Thisorganicgrowthoftheexistingtenantbasehasbeenakeycontributortonetabsorptioninrecentyears.

TotalnetabsorptionintheBrisbaneCBDwas27,473sqmforH12025,thehighestofanyCBDmarketinthatperiod.Thisiscontrarytotheearlierpointonslowleasingvolumes,although,thenetabsorptionisabitofaretrospectivelookatdecisionsmadeinthepast.Forexample,theServicesAustraliamoveinto205NorthQuaywasanexpansionarymoveofapproximately10,000sqm.Inaddition,theFederalGovernmentmoveofabout5,400sqminto300GeorgeStreetcontributedtothenetabsorption.Also,QBCC’smoveto80AnnStreetfromtheNearCitymarketcontributesabout4,400sqmtonetabsorption.MostoftheaboveactivitywasinthePrimemarket,contributing41,905sqmofnetabsorptioninH12025.

Netabsorptionisexpectedtobesolidoverthecomingyearswithmoreexamplesoftenantexpansionratherthancontraction.Forexample,therewillbeafewexpansionarymovesinto360QueenStreetonceitcompletesattheendof2025,althoughsometenantswillmovein2026.Inaddition,planningfortheOlympicsisstartingtogainmomentum,withArchitectsandContractorslikelytobeappointedbytheendof2025orearly2026.Thisislikelytoleadtosomeprojectrequirementsinthecomingyears.

FIGURE2:6-MonthOfficeNetAbsorption–BrisbaneCBD

sqm

120,000

100,000

80,000

60,000

40,000

20,000

0

-20,000

-40,000

-60,000

-80,000

PrimeSecondary

Source:PCA,CBREResearch

FIGURES|BrisbaneCBDOffice|Q32025

4CBRERESEARCH?2025CBRE,INC.

Supply

Supplyoutlookunchangedthroughto2028

ArestrictedsupplypipelineremainsakeythemeintheBrisbanemarket.205NorthQuayisnowcompletedwhichisfullypre-committedbyServicesAustralia.Thattenantisexitingfourdifferent

buildingswithintheBrisbaneCBD(143TurbotSt,140ElizabethSt,400GeorgeStand140CreekSt).However,LegalAidhasaheadsofagreementoverthebackfillspaceat400GeorgeStreet.CharterHallandInvestaremainontracktodeliver360QueenStreetinQ42025,withpre-commitmentofalmost90%,includingBankofQueensland,whohaveaheadsofagreementoveralmost6,000sqm.BDOisakeytenantmovinginto360QueenStreet,withtheirbackfillspaceat12CreekStreetunderheadsofagreementtoCPB.Therefurbishmentof450QueenStreetbyPGIMisunderwaywhichwilldeliverabout17,000sqmtothemarket.Theprojectisdueforcompletioninlate2026,withtenantslikelytooccupyfromH12027.TheonlyothercommittedprojectinthepipelineisDexus’WaterfrontBrisbanebeingdeliveredbytheendof2028withpre-commitmentsforabout50%ofthebuilding.TherearearangeofmootedprojectsinthepipelinesuchasQIC’s101AlbertStreetandCharterHall’s60QueenStreet.However,theseprojectsareyettocommenceconstructionandwillnotbedeliveredpriorto2028.

FIGURE3:BrisbaneCBDDevelopmentSupplyPipeline

80,000

70,000

sqm

60,000

50,000

40,000

30,000

20,000

0

10,000

205North

Quay

143Turbot

Street

140

Elizabeth

Street

400George

Street

140Creek

Street

360Queen

12Creek

Street

480Queen

Street

2026

1Eagle

Street

450Queen

Street

66Eagle

Street

Waterfront

Brisbane-

North

1Eagle

Street

Riverside

Centre

2028

111Eagle

480Queen

Street

2025

2027

Pre-committed%UnderConstructionBackfillBackfillCommitted

Source:CBREResearch

FIGURES|BrisbaneCBDOffice|Q32025

5CBRERESEARCH?2025CBRE,INC.

Vacancy

Vacancyedgeshigherduetosupplyaddition,primevacancysteady

TotalvacancyedgedhigherinH12025to10.7%,asaresultofthedeliveryof205NorthQuayandsubsequentbackfillthatisleftbehind.However,theprimevacancyrate

remainedsteadyat8.0%,giventhestrongnetabsorptioninthatsegmentofthemarket.Premiumvacancyhasdroppedtojust3.8%,whichisthelowestithasbeensinceDec-19.A-Gradevacancyincreasedfrom8.3%to9.6%inH12025,whichisslightlybetter

thanexpectedgiventhreeofthebackfillspacesleftbyServicesAustraliasitintheA-Grademarket.

Thesecondarymarketiswherethevacancyratedidincrease,from13.4%to14.9%.A

significantcontributortothatincreasewasServicesAustraliamovingoutof343AlbertStreet(approx.10,500sqm)intheirnewbuilding.

Weexpectvacancytoincreasefurtherbytheendof2025,whichcoincideswiththedeliveryof360QueenStreet.However,supplyisrelativelyincheckin2026and2027,whichshouldresultinthemarkettighteningfurtherbeforeWaterfrontBrisbaneisdelivered.Inaddition,someofthebackfillthathasarisenisstartingtogetabsorbedwhichisgoingtodrivethevacancyratelower.

FIGURE4:SummaryofBrisbaneCBDOfficeMarket

Market/Grade

Stock(sqm)

–Jun25

NetStock

Change

(sqm)–12

months

Vacant

(sqm)–

Jun25

Vacancy(%)

–Jun25

Vacancy(%)

-Jun24

Net

Absorption

(sqm)–

6months

Net

Absorption

(sqm)–

12months

Prime

1,430,750

45,359

114,467

8.0%

7.2%

41,905

30,336

Secondary

934,368

0

139,279

14.9%

12.9%

-14,432

-15,509

Total

2,365,118

45,359

253,746

10.7%

9.5%

27,473

14,827

%

20

15

10

5

0

-5

FIGURE5:BrisbaneCBDOfficeMarketBalance

sqm

200,000

150,000

100,000

50,000

0

-50,000

201420152016201720182019202020212022202320242025202620272028

NetAbsorptionNetSupply——TotalVacancy(rhs)——PrimeVacancy(rhs)

Source:PCA,CBREResearch

FIGURES|BrisbaneCBDOffice|Q32025

6CBRERESEARCH?2025CBRE,INC.

RentalPerformance

Rentalgrowthmaintained

RentalgrowthhascontinuedtoriseinQ32025,giventherelativelytightoccupiermarket.Primegrossfacerentsgrewby2.3%q-o-qand6.7%y-o-yinQ32025.Incentivesremainedstable,averaging39.5%.Despitethesustainedperiodofvacancydeclinesinrecentyears,incentiveshaveremainedrelativelystickyduetothehighfit-outcostsinBrisbane.Asaresult,effectiverentalgrowthwas2.9%q-o-qand9.5%y-o-y.Overall,effectiverentshaverisenby31.4%overthepastthreeyearsintheBrisbaneCBD.

Thesecondarymarkethasalsoperformedwellwith3.4%y-o-ygrowthingrossfacerents.Incentiveswerealsostableforthequarter,althoughtheyhavedroppedby175bpsoverthepast12monthstoaverage44.1%inQ3.Secondaryneteffectiverentshavegrownby9.7%y-o-y,albeitoffaverylowbase.

StrongrentalgrowthisprojectedtopersistintheBrisbaneCBD.Thisisdrivenbyananticipatedtighteningofvacancyratesthroughmid-2028,whichwillincreasedemandandpushrentsup.Furthermore,thesignificantdifferenceinrentalcostsbetweennewdevelopmentsandexistingpropertieswillalsocontributetothisongoinggrowth.

Incentive

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

FIGURE6:BrisbaneCBDOffice–PrimeRents

$/sqm

1000

900

800

700

600

500

400

300

200

100

0

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Incentive(RHS)NetFaceRent——NetEffectiveRent

Source:CBREResearch

FIGURES|BrisbaneCBDOffice|Q32025

7CBRERESEARCH?2025CBRE,INC.

InvestmentMarket

Significantamountofstockinduediligence,likelytodrivevolumesabove2024levels

TherewasonetransactionrecordedinQ3intheBrisbaneCBD.Thiswas63GeorgeStreet,whichsoldfor$52millionfromQICtoMarquette.Inaddition,GreenSquareNorthTowerinFortitudeValleysoldfor$175million,fromISPTtoQuintessential.WhileYTDvolumes

remainwellbelow2024levels,thereisasignificantamountofassetsinduediligenceinboththeCBDandNearCity.Thiswilllikelydrivevolumesabove$1.5billionfortheyear.

PrimeCBDyieldsremainedstabileinQ32025at7.06%.Yieldshavesoftenedbyatotalof175bpsfrompeakpricinginearly2022.Yieldsarelikelytobeattheirpeakwithapotentialforsometighteningoverthenext12months.ThesecondarymarketyieldinQ32025

averaged8.58%.

Givenrecentinflationdata,themarketisnowpricinginjustonemore25bpratecutoverthenext12months.Thiswouldmeanthatthecashratewillhavedroppedby100bpsfromtheirpeak.Thishelpswithbuyersentimentcombinedwiththestrongunderlying

fundamentalsoftheBrisbanemarket.ThekeybuyergroupremainsdomesticsyndicatorsforBrisbaneoffice.OffshoregroupsremainfocusedonSydney,althoughthismaychangeoverthenextfewyears.

FIGURE7:BrisbaneOfficeSales(greaterthanAUD5million)

4,500

4,000

3,500

$Million

3,000

2,500

2,000

1,500

1,000

500

0

BrisbaneCBDNearCityAverage

Source:CBREResearch

FIGURES|BrisbaneCBDOffice|Q32025

8CBRERESEARCH?2025CBRE,INC.

Outlook

Rentaloutlookremainspositiveforlandlords

Theorganicgrowthintheexistingtenantbaseislikelytocontinueoverthecomingyears,giventhesolidpopulationgrowthandrobusteconomicfundamentalsinQueensland.Thereareveryfew

tenantsconsideringcontractionswhichisshowingupinthelowsubleaseavailabilityfigures.NetAbsorptionislikelytobesolidforthenext18monthsgiventheexpansionarymovesofkeytenantsmovingintoandwithintheCBD.TheplanningphaseofmajorOlympicinfrastructureisinitsearlystages,withprojectspacefromconsultantslikelytooccuroverthenextfewyears.

Thelackofsupplyoverthenextfiveyearsislikelytodrivethevacancyrateloweroverthecomingyears.CBREResearchexpectstotalvacancytoriseabove11%bytheendof2025,coincidingwith360Queenbeingdelivered.However,vacancyisexpectedtodroptobelow10%in2027,withprimevacancyreaching6.6%.

Transactionvolumeswilllikelyriseabove2024levelsoffthebackofastrongQ4,withanumberofdealslikelytosettle.Giventheimprovedinterestrateenvironmentasolidfundamentals,transactionactivityislikelytocontinuetogainmomentumoverthenextfewyears.

FIGURES|BrisbaneCBDOffice|Q32025

9CBRERESEARCH?2025CBRE,INC.

12%

10%

8%

6%

4%

2%

0%

-2%

-4%

FIGURE8:BrisbaneCBDOfficeYield

8.5%

8.0%

7.5%

7.0%

6.5%

6.0%

5.5%

5.0%

4.5%

4.0%

2000

2001

2002