News

Read more

Distinctive Education have eyes only for 243 Edward Street

Distinctive Education – an education provider specialising in business/finance related tertiary courses have made the move from serviced offices to a terrific sub-lease opportunity in the heart of the CBD at 243 Edward Street. (Read More)

After doing an extensive search across the city spanning into parts of the fringe, Distinctive Education moved into 243 Edward Street. The building, opposite central station and Queens Plaza, offers ease of access to the numerous students coming in and out everyday and ample amenities.

Distinctive Education opted for a sub-lease, which was a cost effective option but also provided great lease-term flexibility for the business already undergoing rapid growth.

Moving to a larger serviced office space to accommodate growth wasn’t an option as then this becomes very expensive per square metre and financially unsustainable.

Distinctive Education have added to the growing number of businesses who made the move out of serviced offices into a longer term, more traditional spaces. Chris Chapman negotiated this lease, for more information please contact Chris on 0401 153 992.

Read more

pitt&sherry Take Occupancy in Club Tower

Australian founded and nurtured engineering firm pitt&sherry have relished recent business opportunities in Brisbane and accordingly upgraded their office to Level 10 of the city’s stalwart – 241 Adelaide Street, the Brisbane Club Tower.

Internal growth and the acquisition of aligned businesses coincided conveniently with the business’s lease expiring at Bowman House, allowing them an easy opportunity to come to market in the search for a new premises.

Chris Chapman helped pitt&sherry navigate a market flush with options to finally narrow down the selected shortlist to five (5) properties. With a variety of cost-conscious and higher quality fit outs in the mix, the engineers found that the value in a spec fit out and central location was too great to pass up, finally setting long-term on a 223sqm spec overlooking Post Office Square and Adelaide Street.

Chris negotiated the lease in conjunction with Knight Frank, the appointed agency. Please contact Chris on 0401 153 922 for further details or to enquire about other Brisbane opportunities.

 

 

Read more

Why Have Spec Fit-outs Become So Popular For Tenants?

Before we answer that question, it is important to define exactly what ‘speculative’ fit-outs are.

A speculative fit-out, or ‘spec fit-out’ as they are known within the office leasing space, are new fit-outs constructed by landlords without any pre-commitment to the space by a prospective tenant.

Why would a landlord build a fit-out without any commitment from a tenant? 

Fitout works done ‘on spec are by no means a new concept. Landlords have always looked to re-use existing fit outs within their buildings by making changes to the presentation and design in order to re-present fitted out space back to the market in a better light. It makes commercial sense to do that. What we haven’t seen landlords do in the past, that we are seeing nowis build full fitouts (from scratch) with no prior commitment to the space from a tenant. 

Click Read More

Since late 2012, the office market in Brisbane has been suffering from very high levels of vacancy. The competition between building owners to secure new tenants has been fierce, and therefore landlords have been looking at different ways to present their space in order to give their properties an edge. By having newly fitted out office suites available on display, prospective tenants are able to ‘touch and feel’ what they are getting, which often gives them far more confidence to make a decision. 

 The speculative suite market has now taken on a life of its own, and there have been hundreds of suites built across the Brisbane CBD and inner fringe areas over the past five (5) years with plenty more coming. 

Tenant benefits in leasing a spec fit out space

  1. The risk around the cost and delivery of the fit-out lies entirely with the landlord. The tenant has no liability whatsoever, which is attractive to many businesses.
  2. There is no time expended by the tenant in having to work with designers to plan the layout and pick the finishes. For many business owners and/or senior managers this is one of the key benefits.
  3. Quite often there is far more flexibility for the tenant around the term of the lease that they can take. Many businesses, particularly those that are still in their relative infancy, prefer lease terms of three (3) years as a maximum. For non-fitted space, it is not financially viable (in the main) for a tenant to deliver a fit-out themselves on anything less than a four (4) or five (5) year lease.
  4. Spec fit-outs allow prospective tenants to move very quickly and easily, which can be a major benefit for a business, particularly if they are experiencing rapid growth, or are managing change within their business.
  5. Tenancies with a spec fit-out can often be far more financially attractive to an incoming tenant. Many landlords will offer additional incentives as rental abatement over and above the new fit-out, even on lease terms as low as three (3) years. This is not achievable on non-fitted space.
  6. Landlords and agents have now become very adept in partnering with designers to create amazing new office space environments. Most building owners have now rolled out multiple new fit-outs within their properties and understand what finishes are most attractive to tenants. The competitive nature of the market place has driven a strong focus on quality, and owners would rather err on the side caution by investing more heavily in their suites to ensure they have the very best chance of leasing.
  7. Tenants that have leased a space with a spec fit-out are not required to carry out a full ‘make good’ (strip out) at the end of the lease term. Requirements of a ‘make good’ are that the tenant returns the space to the landlord as they found it. This isn’t required with spec fit-outs as the landlord paid for and owns the suite, so no strip out is needed. 


Tenant negatives in leasing a spec fit out space
 

  1. Given the landlord is constructing the fit-out ahead of any tenant commitment, whilst also owning the fit-out for the duration of the lease, the landlord has full control of the fit-out design. Therefore some level of compromise on the tenant’s side in the terms of the layout is required, as it is not purpose-built to their requirements.
  2. The tenant cannot be entirely sure about the quality of the fittings and finishes within the space, given the fit outs are often completed prior to any formal leasing campaign being undertaken. This risk can be partially mitigated by the tenant conducting sufficient due diligence with the fit-out company that designed and managed construction of the suite/s.
  3. Spec fit-out office spaces are generally not completed to a point that a prospective tenant can walk in and start working. Most newly fitted out suites are not hard wired to the work-points and require additional power-points to be installed. Depending upon the specific needs of the tenant this can often cost between $800 – $1,000 per work-point.

Summary 

There have been a large number of new leases that have been transacted within tenancies that have been fitted-out speculatively, particularly over the last 2-3 years. It has been a very successful strategy for building owners to attract new tenants to their properties.  

We expect to see plenty more spec suites coming to market in the short to medium term, particularly whilst the vacancy rates in Brisbane remain above the historical long-term average.  

Once the vacancy rates in Brisbane begin to decrease a little more than what they currently are (anticipated within 12 – 18 months), the number of suites built speculatively is expected to decrease. Building owners will be less motivated to commit the upfront capital to construct these fit-outs, particularly without a commitment from the tenant in place. The incentives packages will also reduce in-line with the vacancy rates, and there will be an emphasis on the tenants to contribute monies towards fit-outs themselves. 

 There are currently more than sixty-five (65) spec suites either completed, or under construction within the Brisbane CBD.  

 To discuss your office space needs please contact Caden Office Leasing on info@caden.com.au or call 3014 5406 and ask to speak to one of our leasing operatives. 

 Pictured above: Level 16, 40 Creek Street Brisbane

Author

David Prosser 

Director, Caden Office Leasing 

david.prosser@caden.com.au 

Read more

LawLogic expand into Emirates House at 167 Eagle St

Young legal group LawLogic Pty Ltd have cemented their presence in the Brisbane market with the opening of their new office at Bramley’s 167 Eagle St.

With a considerable number of strings to their bow generating uncertainty about their long-term requirements, LawLogic have accounted for their growth potential with a short-term lease on 189sqm of Level 21. The availability of existing fit out allowed the business to maximise the incentive provision as rental abatement and structure a lease that handed them access in a matter of weeks.

The ongoing promise of a new Riverfront bar on Emirates House’s ground plain has, in Quarter 3, become a reality and a great attraction for incoming businesses. The unique model of the bar’s operation will stretch Eagle Street’s entertainment precinct and bring a new life to the building.

Lewis Harper managed LawLogic’s requirements and negotiated the lease with K2 Private representative Stuart Moody. Please contact Lewis on 0437 187 659 for further details or to enquire about other Brisbane opportunities.

Holt Durham Migration Make The Move To The North Quarter

After almost two decades based on Wickham Terrace, migration services firm Holt Durham Migration have relocated their offices to the Kyko Group’s 193 North Quay.

HDM Migration is a boutique migration firm whose clients include some of the largest mining companies in Australia. After an extended period of time in an ageing Spring Hill building, Holt Durham felt that after a detailed search spanning across a large part of the B Grade market, 193 North Quay was their premier choice.

HDM were able to make use of a good-quality 84sqm partial fit out that had remained from a previous occupier, committing to a long term lease.

Please contact Chris Chapman on 0401 153 992 for further questions regarding this lease.