BrisbaneFringe

OfficeMarket

knightFrank

December2025sFtroindivilslsifgasrentalgrowth.au/research

Strongtenantdemandforprimespacehaskeptupward

pressureonrentsasvacancyfallsinclimateofnonewsupply.Investmentvolumesarelifting.

JENNELLEWILSON

PARTNER,RESEARCH&CONSULTING

10.5%

Totalvacancyfalling

Totalvacancydecreasedfrom10.7%inJanuary2025to10.5%inJuly2025,

withaperiodofstrongpositivenetabsorptioncoupledwithnonew

supplyinover18months.

15,963

SqmnetabsorptionFY-25Netabsorptionremainedpositive,duetosteadyprimeabsorptionof

9,462sqminthe6-monthstoJuly-25.

Thewholefringemarketisupby15,963sqmovertheyear.

-4,518

SqmnetadditionsFY-2025

FY2025supplywasnegativewiththewithdrawalofobsoletestock.Thisisexpectedtocontinueinto2026,

keepingnetadditionsmodestly

negative.Therearenonewbuildingsunderconstruction.

8.8%

Primegrosseffective

growthp.atoOct-25

LimitedavailabilityingoodqualityassetsandthedifferentialtotheCBDhascontinuedtodriveprimerents.

4.8%

Primegrossfacerent

growthforecastCY2026Whilethetopbuildingsareexpectedtocontinuetoshowgoodgrowth,the

relativelyhigheramountofcontiguousvacancynextyearisexpectedtolimitthemarketasawhole.

7.95%

Primemedianyield

Primeyieldshavebeenstablenowforayear.Recentliftintransaction

activityandgreatercompetitionbetweenbuyersputsyieldsona

firmingbiasinto2026,despitelesssupportfromthemoneymarket.

BrisbaneFringeofficeMarketIndicators-Q32025

urbanRenewalInnersouth

Milton

springHill

Toowong

prime

secondary

582,806288,818

230,016

74,647

720,918

607,431

Totalvacancy%*

14.1

6.4

8.3

13.1

Annualnetabsorption(sqm)*

10,0034,603

2.570

956

-257

21,031

5,068

15,963

Annualnetadditions(sqm)*

3,268o

-1,250

-4,518

4,518

GrossFaceRent$/sqm

767~773~

707~

752

Incentive%(gross)

39%~38.5%~

40%~

39.5%

coremarketyield(%)Λ-----7.95%9.13%

*asatJuly2025n/aoraggregatednumbersprovidedonly~primeΛassumes35yearwALESource:knightFrankResearch/PCA

2BRISBANEFRINGEOFFICEMARKETmmDECEMBER2025

BRISBANEFRINGEOFFICEMARKETmmDECEMBER20253

forprimespace

POSITIVEDEMAND,BUTSLOWERMOMENTUM

TheBrisbaneFringemarketrecordedpositivenet

absorptionof1,409sqminthesixmonthstoJuly2025,withatotalof15,963sqmabsorbedovertheyear.Whilethefirsthalfof2025deliveredasofterresult,withsteadyprime

absorptionbeingnegatedbyfallsinsecondary,overall

performanceremainsresilient.Overthepastfouryears,theFringehasconsistentlyoutperformedothermajor

Australianofficemarkets,highlightedbyapeakannual

absorptionof63,625sqminCY-2022.However,withnonewcompletionssincelate2023,tenantshaveincreasinglyfacedfeweroptions,particularlycontiguousA-gradefloors.

CURRENTLEASINGLANDSCAPEISBIFURCATED

Marketactivityhasamplifiedthedifferingfortunesof

primeandsecondarystock,withdemandcontinuingto

focusonhigh-quality,well-locatedassets.Primenet

absorptionwassolidinH1-25,with9,462sqmrecorded,

21,031sqmovertheyear.Incontrast,secondaryabsorptionhasweakened,with-8,053sqminH1-25and-5,068sqmovertheyear,withtenantsprioritisingqualityassets.

TheresultisamarketthatremainspositiveoverallbutfollowsasimilarflighttoqualitytrendasrecentlyseenintheCBDwithaclearpreferenceforquality,amenity,andESG.

Locationremainsakeydriverofdemand,withassetsintheUrbanRenewalprecinctrecordingpositiveabsorptionof5,119sqminH12025and10,003sqmovertheyear.The

InnerSouthalsopostedgains,with173sqminH12025and4,603sqmovertheyear.Theseincreasesacrossthetwo

largestprecinctsweresufficienttooffsetnegative

absorptioninMilton,SpringHillandToowong,whichcollectivelyaccountedfor-3,883sqminH12025.

TENANTBRIEFSCONFIRMQUALITYFRINGESPACEREMAINSINDEMAND

SupportingdemandfortheFringeprecinct,and

potentiallyawakeningdevelopmentproposals,thereare

severallargeoccupiersactiveinthemarket.TheseincludeYoui,seeking15,000-20,000sqmofA-gradespacewithintheFringeby2026,withapreferenceforowneroccupation.Additionally,EnergyQueensland,alreadyamajorFringetenant,hasreleasedabrieffor16,000-18,000sqmof

premiumorA-gradeaccommodationineithertheCBDorFringeforoccupancy2030.TheAFP,currentlylocatedinNewstead,alsohaveabrieffor8,000-10,000sqmofAorBgradehighsecurityfacilityacrossBrisbaneforoccupancyfrom2029.

-20

-40

source:knightFrankResearch,PCA

AnnualnetabsorptionFY2025'000sqm

source:knightFrankResearch,PCA

BrisbaneFringeNetAbsorption'o00sqmprimeandsecondary

primesecondaryTotal

-20

-40

NetAbsorptionbyprecinct

source:knightFrankResearch

4BRISBANEFRINGEOFFICEMARKETmmDECEMBER2025

NONEWOFFICECOMPLETIONSASSUPPLYCONTRACTS

Thecompletionof895AnnStreet,FortitudeValley,inH22023wasthelastmajornewadditiontotheBrisbaneFringeofficemarket.Sincethen,therehavebeennonew

significantcompletions,withasmallamountofspaceaddedaspartofanagedcaredevelopment.Themostsignificant

changestostockhasbeendrivenbyongoingsmaller

withdrawalsofolderspace.Thelargestrecentwithdrawal

was30LittleCribbStreet,Milton,an8,700sqmA-grade

officeasset,whichwaswithdrawnforconversionintoshort-termaccommodationinH12024.Asaresult,totalFringe

officestockhasdeclinedbyaround1.2%overthepasttwoyears.Withnosignificantnewspacecurrentlyunder

construction,orwiththereasonableexpectationof

imminentcommencement,totalstockisexpectedtoremainstatictocontractingintheshortterm.

FEASIBILITYCHALLENGESCONTINUETOSTALLNEWPROJECTS

WhileseveralsitesacrosstheUrbanRenewalcorridorholdexistingapprovalsforofficedevelopment,feasibilityconstraintscontinuetodelaynewconstructionstarts.

Developershavecontendedwithrisingconstructionand

labourcosts,extendeddeliverytimeframes,andhigher

fundingexpensesforsometimenow.Theseconditionshavemadeitincreasinglydifficultfornewofficeprojectstomeetrequiredreturnthresholds,evenamidsustainedoccupierdemandforqualityspace.Whilerentalgrowthhasbeen

ongoingthereremainsagapbetweenmarketandeconomicrentsandthesupplypipelineisexpectedtoremainlargelyinactive,withnewofficestartsunlikelyintheshortterm.

DEMANDFORRESIDENTIALDEVELOPMENTSLIMITINGOFFICESTOCK

Risingdeveloperfocusforresidentialoralternative

investmentproducthasdiverteddevelopmentawayfromcommercialprojects.Severalapprovedofficesiteshave

shiftedtowardresidential,reflectingthestrongpre-sale

environmentwhichmaypresentaneasierpathto

developmentfunding.Anexampleis166-180Breakfast

CreekRoad,Newstead,originallyapprovedforan8-storey,18,656sqmofficetower,morerecentlyapprovedfora762-unitresidentialdevelopmentacrossthreetowers.

Residentialdevelopment,eitherforbuild-to-sellorBTR,studentaccommodationorco-livingremainschallenginghowever,withmanysitesintheFringeremaininginflux.

WhiletheFringehasthepotentialtodelivernewofficesupplyfasterthantheCBD,andinmorebite-sizedprojects,thisisnotexpectedtoemergeuntilatleast2028.

significantsupply

Developer

[Commitment]

RecentlyCompleted

OfficeArea

Property

Timing

43EvelynSt,Newstead

2,548

H22025

Ozcare(partofamixedusecomplex)

Mooted

13,000STPQuintessentialEquity

58MorganSt,FortitudeValley

1KingSt,FortitudeValley27,000STPLendlease

32,000

STP

BarwonCapital

PAHealthConnect,Woolloongabba

Woolloongabba25,000STPPellicanoGroup

Source:KnightFrankResearch^podiumofficecomponent

SouthCitySquare,Upto

"WhiletheFringehasthepotentialto

delivernewofficesupplyfasterthantheCBD,andinmorebite-sizedprojects,thisisnotexpectedtoemergeuntilatleast

2028."

BrisbaneFringeNetAdditions

'000sqmnetofgrosssupplyandwithdrawals

-20

-40

source:knightFrankResearch,PCA

BRISBANEFRINGEOFFICEMARKETmmDECEMBER20255

DESPITELIMITEDABSORPTIONVACANCYSTILLFELL

TotalvacancyacrosstheBrisbaneFringefellto10.5%inH12025,downfrom12.0%ayearearlier,asongoingnet

absorptionandalackofsupplytooktotalvacancylower.

Thisimprovementwasdrivenbytheprimesector,falling

steadily,withtheabsenceofnewdevelopmentplacing

continuedpressureonavailablespace.AsatJuly2025,

primevacancyhadtightenedto8.3%,downfrom9.7%atthestartoftheyearand11.3%ayearearlier.Incontrast,BandCGradevacancyincreasedwithBGraderisingfrom11.4%to13.4%,andCGradeliftingto12.8%,upfrom12.1%sixmonthsprior.DGradevacancycontractedsharplyfrom31.6%to

18.7%,thoughasDgradestockrepresentsonly1%ofthetotalfringe,thechangeisrelativelyinsignificant.

FALLSINTOTALVACANCYCONFINEDTOTWOPRECINCTS

AlthoughtotalFringevacancydeclinedoverall,fallswereconcentratedinjusttwoprecincts,theUrbanRenewalandInnerSouth.TheInnerSouthrecordedonlyamarginal

decrease,from11.9%to11.8%,whileUrbanRenewal

experiencedamorepronouncedfall,withvacancydroppingto8.6%from9.6%sixmonthsearlierand10.8%ayearago.

Asthelargestprecinct,accountingfor44%oftotalstock(followedbytheInnerSouthat22%),UrbanRenewal’s

strongerperformancehadasignificantinfluenceontheoverallmarketresult,offsettingrisingvacancyinMilton,Toowong,andSpringHill.

Toowongcontinuestoholdthetightestvacancyinthe

Fringeat6.4%,upslightlyfrom5.3%inJanuary2025and

6.0%ayearearlier.Withnochangetototalstock,therise

reflectsnegativenetabsorptionof768sqm.Incontrast,

Miltonrecordedthehighestvacancyat14.1%,upfrom13.1%sixmonthsearlier,following2,273sqmofnegativenet

absorptionovertheperiod.

PRIMEVACANCYHASEXPOSURETOLARGETENANTMOVESINTOTHECBD

Totalvacancyisexpectedtoremainabove10%into2026.Primevacancyremainsonatighteningbiasbutintheshorttermhasupsideriskandpotentialvolatilityduetothe

timingandquantumoftenantcontractionsandrelocationsintotheCBD.During2025tenantssuchasComparethe

market,APLNGandConocoPhilipshaverelocatedfromtheFringeintotheCBD.ThistrendhasacceleratedwithbothBOQ(leavingc8,000sqm)andCIMIC(leavingc12,900sqm)bothnowcommittedtoCBDlocationsin2026.Inaddition,BCCwillvacate505StPaulsTce,FortitudeValley

(16,500sqm)in2027.

BrisbaneFringevacancy

%vacancyrateprimevsecondary

primesecondaryTotal

source:knightFrankResearch,PCA

BrisbaneFringevacancyRate

source:knightFrankResearch,PCA

BrisbaneNearcity-Demand&vacancy'000squaremetres(LHS),%vacancy(RHS)

-20

-30

-40

21.0%

18.0%

15.0%

12.0%

9.0%

6.0%

3.0%

0.0%

source:knightFrankResearch,PCA

BRISBANEFRINGEOFFICEMARKETmmDECEMBER2025

RENTALGROWTHISSTRONG,DRAWNUPWARDSBY

THEBESTINCLASSASSETS

Primefacerentshavecontinuedtogrowthrough2025,drawnupwardsbylimitedcontiguousopportunitiesandbenchmarkingagainstastronglygrowingCBDmarket.

Primegrossfacerentswereupby5.2%intheyeartoOctober2025toaverage$752/sqm.Withthetopofthemarketdrivinggrowththereisawiderangeofprimerentsbeingachieved.Latestgenerationbuildingswithaprimelocationarenowinthe$825-850/sqmbracket,whileolderormorevanillaA

gradeproductmaysitwithinthe$650-780/sqmrange.

Primeincentiveshaveseensomeerosionoverthepast12monthsbutdoremainhigherthantheCBDmarketatan

averageof39.5%,downfrom41.5%intheyear.Incentives

areexpectedtocontinuetograduallydecreaseoverthenextfewyears,butwillremainanimportantfactorfortenantstorelocateandundertakenewfitout.Qualityexistingfitout

maybeabletoreducetheoverallincentivelevelwherethereisdemandforoccupationintheshortterm.

Secondaryrentshavecontinuedtoappreciatefromalowbase,upby8.1%grossfaceintheyearto$584/sqm.

BENCHMARKINGTOTHECBDWILLBECRITICAL

ThegapbetweenAgradeCBDrents($960/sqmgrossface)andprimefringerentsiscurrently28%,higherthanwas

seenduring2024,butinlinewithlongtermaverages.ThisputsexistingAgradeCBDspaceindirectcompetition,orfrequentlycheaperthan,newFringedevelopments.

PotentiallycontinuingtheflightintotheCBDforlarger

tenantsintheshortterm.DespitetheexpectationofmorecontiguousAgradevacancyacrossbothmarkets,these

relativitieswillcontinuetodrawfringerentsupwards.

BrisbaneFringeRents

$/sqmgrossfaceprimevsecondary——primesecondary

750

650

550

500

450

400

350

300

source:knightFrankResearch

FringeandcBDRelativities

$/sqmavgrossfacerents(LHS),%CBDAgradepremium(RHS)

%CBDpremium——primeFringeAGradecBD

50%

40%

30%

400

20o

20%

10%

source:knightFrankResearch

Recentsignificanttenantcommitments

Occupier

Property

Precinct

Sizesqm

GrossFace

Rent$/sqm

Incentive%

Termyrs

StartDate

DynoNobel

515StPaulsTce,

FortitudeValley

Urban

Renewal

3,842

840

40+

6

Mar26

ICONGroup

825AnnSt,

FortitudeValley

Urban

Renewal

3,296

825

35-40

10

Jul27

PublicisMedia

25KingSt,BowenHills

Urban

Renewal

1,200

780

u/d

10

Sep25

JumboInteractive1ironationDr,Milton2,74675035-4010Jun25

Source:KnightFrankResearchu/d-undisclosed

BRISBANEFRINGEOFFICEMARKETmmDECEMBER20257

BrisbanecBD&Fringesales$millionvolumeforsales$1OM+

UCBDUFringe

4000

3500

3000

2500

2000

1500

500

source:knightFrankResearch

FRINGEMARKETTRANSACTIONSLIFTINTANDEM

WITHTHECBD

TransactionvolumesintheBrisbaneFringehave

reboundedaftertwosubduedyears,with$493millionin

sales($10m+)recordedacrossthenearcitymarketasat

November2025,wellabovethetotalsforboth2023and

2024.Activityhasbeendrivenbybothprivateinvestorsandunlistedfirms,reflectingrenewedappetiteforqualityofficeassets.Thisrecoveryhasbeensupportedbythelowercostofdebtfollowingearlierratereductionsandimproving

investorsentiment.Combinedwithfirmtenantdemand,limitednewsupply,andsteadyrentalgrowth,thesefactorshavemadetheFringeincreasinglyattractivetoinvestorsseekingexposureatacomparativelylowercostbasethantheCBD.

NearcityvcBDprimeofficeyieldsmedianyields(LHS),bpsgap(RHS)

mspread——CBD——Fringe

10%

10%

5%

5%

4%

source:knightFrankResearch

120

FRINGEYIELDSTOREMAINSTABLEINTO2026

PrimeyieldsintheFringehaveheldsteadyat7.95%,

mirroringtheCBD,whereaverageprimeyieldshave

remainedunchangedat7.25%sincemid-2024.Increased

transactionactivityandgreatermarketconfidencehave

reinforcedyieldstability.Recenttransactionsofprime

assetssuchas515StPaulsTerraceand505StPaulsTerrace,FortitudeValleyfor$174.85millionand$132.01million

respectivelywerethefirstprimesalesabove$100millionintheNearCitysinceearly2023.Thisreflectsthe

reinvigoratedappetiteforlargerassetswhichemergedinQ42025.Thec$150millionsaleofthemixed-usePetrie

Barracksalsoreinforcesthistrend.

Despiteexpectationsofcashratereductionshaving

recentlybeensubdued,yieldsareexpectedtoshowfirminginto2026asbuyercompetitionintensifiesandformal

campaignsmeetwithgreatersuccess.

Recentsignificantsales

Property

Price$m

Core

Market

Yield%

NLA

sqm

$/sqmNLA

WALE

Purchaser

Vendor

SaleDate

515StPaulsTce,FortitudeValley

174.85

8.06

23,674

7,386

2.4

Quintessential

ISPT

Aug-25

505StPaulsTce,FortitudeValley

132.01

7.51

17,613

7,495

2.1

SentinelPropertyGroup

AXAInvestmentManagers

Jun-25

339CoronationDr,Milton

80.00

8.50

12,980

6,163

3.2

AcureAssetManagement

KeppelCa