OFFICE MARKET OVERVIEW
National Office Market The national office market experienced a positive shift in Q2 2024, with notable improvements in demand and rental growth across major cities. Total net absorption reached 51,900 sqm in the first half of the year, marking the best performance since H1 2022. National office vacancy rates decreased to 14.60% and rents have continued to grow with all CBD markets recording positive prime net effective rental increases. Investment activity has surged with $2.87 billion in office assets sold, the highest quarterly result in 18 months. Prime yields softened slightly, reflecting the stable interest rate environment and improved buyer sentiment. Major transactions in Sydney and Brisbane have highlighted ongoing interest from both international and domestic investors. Overall, the Australian office market is showing signs of recovery from a cyclical low, with stabilising vacancy rates, growing rental demand, and increased investment activity. (CBRE Australian Office Figures Q2 2024)
Mackay Leasing Market Mackay has a two-tiered office market:
The Mackay Child Safety Service Centre occupied the Property in 2022 after undertaking a $2 million upgrade to provide a high standard of office accommodation specialised to suit their long-term operational requirements. These include: • Dedicated secure secondary access at the rear of the tenancy; • Dedicated secure Car Park; • Amenities reconfigured to accommodate the high female staff ratio of the department; • Secure dual access meeting/interview rooms for child & staff safety; and • Other specialised security requirements including CCTV installations. Given the minimum NABERS Energy requirement of State and Commonwealth Government tenants and the specialised operational requirements of the Mackay Child Safety Service Centre, there are no suitable relocation options in the Mackay region. Further, 9 Tennyson Street has the capacity to provide expansion/overflow accommodation when the existing ground floor leases approach expiry.
• Small Tenancy (<500sqm) requirements driven by smaller organisations and larger resource groups with local office requirements; and • Large Tenancy (>1000sqm) requirements for high quality office accommodation suitable for government agencies and not-for- profit organisations. The small tenancy market has a moderate level of existing available stock, however many of these options have a dated fit -out or require significant capital works to upgrade the tenancies to a suitable standard. The large tenancy market has very limited existing supply of high-quality office accommodation which are suitable for government agencies. 9 Tennyson Street provides one of best tenancies in this market, with a 5 Star NABERS energy rating, large floor plate, modern/contemporary fitout, disabled access and an abundance of natural light.
QUANTA TENNYSON STREET OFFICE TRUST | Information Memorandum
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