Why Office Vacancy Rates Are Irrelevant and How They Distort Real Opportunity for Tenants

Vacancy rates have long been the headline metric used by landlords, developers, and agents to summarise office market conditions. But for corporate tenants navigating real leasing decisions in Brisbane’s Premium and A-grade office market, vacancy rates are increasingly irrelevant and, in many cases, misleading. Rather than revealing opportunity, they obscure it, distorting the tenant’s perception of availability and strengthening supply-side narratives that favour landlords.

 As of Q2 2025, Brisbane CBD’s Premium and A-grade vacancy rates sit at 7.3% and 8.3% respectively. On the surface, these figures suggest tightening conditions and limited availability. Yet this interpretation completely ignores what truly matters to occupiers: What space is actually available? Is it contiguous? Is it built? Is it deliverable within 6 to 12 months? The reality is, vacancy rates provide no answers to these questions. Instead, they aggregate all unoccupied space, regardless of its quality, timing, or market readiness into a single percentage that bears little resemblance to real tenant options.

For corporate occupiers seeking 1,000 to 3,000 sqm of contiguous, high-spec space, particularly within a 6–12 month timeframe, the vacancy rate is not part of their decision-making. These tenants are focused on real market conditions: reviewing live briefs, direct availability, subleases, speculative fitouts, and project delivery windows. What they’re finding is that opportunity does exist, but not because of a 7% vacancy headline. It’s because new supply is unlocking backfill space, incentive levels remain attractive, and landlords are under pressure to de-risk partially leased buildings.

Take the delivery of 205 North Quay and 360 Queen street in late 2025. These towers will introduce nearly 90,000 sqm of new Premium and A-grade space, but most of that has already been pre-leased—100% in the case of 205 North Quay and approximately 75% at 360 Queen street The space that does remain available is limited and contested, yet still counted as part of the headline vacancy. Simultaneously, the tenants moving into these new towers will vacate significant space in other Premium buildings, creating backfill opportunity that isn’t captured—or is only partially reflected—in vacancy data

This backfill space often enters the market quietly, sometimes off-market, or is repositioned for sublease. It presents genuine opportunity for incoming tenants, particularly those seeking turnkey solutions or discounted deals. But because it doesn't show up as new stock, it’s excluded from the narrative that vacancy rates perpetuate one of constrained supply and rising pressure.

What’s more, net absorption remains sluggish. Brisbane recorded –12,646 sqm of net absorption in the six months to Q2 2025, despite strong pre-leasing activity. This reinforces the point that leasing activity in new supply is largely about tenant churn—not expansion—and that headline figures are not telling the real story of tenant behaviour or market capacity.

So why do landlords and developers continue to promote vacancy rates? Because it suits them. Quoting a 7% vacancy figure in the Premium market suggests scarcity, which justifies firming rents and reduced incentives. It also reinforces the notion that tenants must act quickly or risk losing out when in fact, the pipeline of upcoming vacancy through tenant relocations is substantial, and landlords are increasingly negotiating on both rent and fitout contributions to compete for briefs.

Vacancy rates, in this context, are not a neutral data point, they’re a tool of market positioning. They are used to steer the narrative toward tight conditions even when genuine, occupiable space is coming online or being left behind. This distorts the true balance of power in lease negotiations.

For tenants, the message is clear: Ignore the vacancy rate. Instead, assess the market based on live opportunities, delivery schedules, competitive pressure, and incentive structures. The actual supply-demand balance, particularly in the 1,000–3,000 sqm segment is defined not by how many square metres are technically vacant, but by how many are truly available, deliverable, and suitable. And right now, despite what the vacancy headlines say, that number is rising quietly, steadily, and in favour of the tenant.