New Farm for Mitchells
Written on the 11 February 2009
NEW Farm’s James Street continues to cement itself as a creative hub following the relocation of Mitchell Communication Group from its existing premises in Spring Hill.
Australia’s largest online and offline media buyer has taken up residence in a 700 sq m space which was leased as a turnkey solution – with the owner stripping, refitting and custom designing to Mitchells’ requirements.
The six-year, $500,000 deal was negotiated by Jones Lang LaSalle’s Don Mackenzie and Tom Barr. For Mitchells staff, the added benefit of the James Street location was the lifestyle and coffee culture for which the area is famous.
Mackenzie said the Brisbane fringe office market had reached the pinnacle of its supply cycle in Q3 2008, with four projects totalling 55,000 sq m reaching completion, however noted that the fringe market would also be affected by the global economic situation and warned of a softer demand environment.
“In the latest Jones Lang LaSalle Q3 research into the Brisbane fringe market, demand appeared strong on the back of healthy pre-commitments to the incoming supply, although enquiry levels have anecdotally slowed in line with the softer global economic environment,” he says.
Mackenzie says vacancy had eased from 3 per cent to 3.9 per cent, as supply outweighed demand and back-fill spaces emerged. An increase in incentives in Q308 saw effective rents decline, with prime gross effective rents falling 5.4 per cent and secondary effective rents falling 10.1 per cent in the quarter.
Research shows one sale transaction of $18.7 million was recorded, while prime yields softened further in the quarter reflecting the ongoing uncertainty in investment markets.
While the peak of the supply cycle in the fringe has now passed, the softer demand environment and the large supply pipeline in the CBD will continue to place downward pressure on effective rents in coming quarters. Although there are many global economic challenges ahead, Queensland’s economy is in one of the best positions nationally to weather the global storm.