LOW INTEREST IN BRISBANE OFFICE METRO

BRISBANE has experienced a record year of metropolitan office sales volume - yet demand is still weaker than in any other state, according to real estate outfit Colliers International.

A few big individual buys from foreign investors drove the total value of metropolitan sales to $800 million, but buyers looking at Brisbane were more interested in the CBD than the metro.

Across all other states, about 45 per cent of potential buyers were looking at metropolitan offices first and CBD second. In Queensland it was barely 15 per cent.

In 2014, Brisbane only received enquiries for 30,000 square metres of metropolitan offices. Even with its smaller population, Perth received enquiries for at least 40,000 square metres.

Sydney and Melbourne combined received enquiries for nearly one million square metres.

Brisbane was the only city to receive enquiries for less space in 2014 than it did in 2010. Interest dropped sharply between 2010 and 2011, from about 120,000 square metres to 40,000, and hasn't recovered since.

Colliers' report argues that the availability of sublease space in Brisbane's CBD is drawing buyers away from the metro. While interest in Brisbane metro sits at its lowest in five years, interest in Sydney metro has almost tripled since 2010.

The record-breaking $800 million of total sales, which seems to contradict the lack of interest, was bolstered by the $200 million one-off deal for Southpoint Estate, the $100 million sale of Ausenco House, and the marked-up $46 million paid for a former TAFE site in South Brisbane.

All of these purchases were from foreign investors - from Germany, Singapore, and China, respectively.

Despite - or perhaps due to - the low levels of general demand, Brisbane metro was attractive to offshore investors in 2014, particularly in the Inner South. Nearly 45 per cent of the total sales volume was attributable to foreign buyers.

However, the leasing market remained soft. Vacancy rates in Brisbane metro are at their highest since 2002, having reached 12.8 per cent in January 2015. In Milton and Spring Hill, the vacancy rate is closing in on 18 per cent.