Following in the footsteps of Sydney and Melbourne, Brisbane is the latest Australian city to experience a boom in the flexible workspace market.
An early adopter of the coworking trend, Australia has recorded significant growth in flexible workspace over the past five years. Once seen as a niche product for startups and freelancers, flexspace is now attracting much larger companies and organisations looking to trade the traditional office set-up to allow for expansion and flexibility.
“Demand is continuing to improve in Brisbane as the market catches on to the flexible office and coworking growth seen in the larger cities of Sydney and Melbourne,” says Damien Sheehan, IWG Country Head for Australia. “Regus has been in the local market for many years, largely with company-owned centres and prior acquisitions, so we need to ensure our product remains relevant.”
Brisbane is experiencing rapid growth at the moment, largely due to its affable outdoor lifestyle and affordable housing market – especially compared to Sydney and Melbourne – and its population has grown by more than 500,000 in the past seven years. Flexible office space is proving to be one of the fastest-growing areas of commercial-property leasing, and the limited amount of commercial space available in other regions of Australia could be one of the main instigators behind the demand.
“Over the past 12 to 18 months the Brisbane market has continued to gain momentum with the flight to quality resulting in prime-grade space becoming much harder to find,” says Simon van Grootel, IWG's Network Development Director for Australia. “The Brisbane area is now following the national trend of a shortage of high-quality stock. Similar to other capital cities like Sydney, Canberra, Adelaide and Perth, there is very limited new supply forecast to come online in the next two to three years.”
Following the downturn of the resources industry in 2011, which saw vacancy rates in the city soar to more than 20%, the office market in Brisbane changed substantially to become much more diverse as the professional services, government and education sectors grew.
“From a property perspective, we see larger occupiers not just exploring the option but demanding to have flexible space solutions,” says van Grootel. “All new developments in Brisbane will have a flex provider, which we’re seeing grow as a percentage of the total building area. We anticipate that, as brokers, tenants and landlords will continue to grow their understanding of our industry, we will only see the demand for our services accelerate. However, although confidence appears to have returned with limited supply coming online until 2021/2022, the market will continue to tighten,” he concludes.
“Our focus right now is on improving the quality of our product to remain top of mind and competitive as new entrants enter the Brisbane market,” states Sheehan. “Both Hub Australia and WeWork have opened large centres in 2019 and there’s definitely interest from other competitors to enter the market. But our real competitive advantage is our network across Australia and our people running the centres – they truly make the difference.” With eight locations in Brisbane, discover how your business could benefit from an IWG flexible workspace.