A shortage of commercial office space in Toowoomba is driving business owners to buying homes on the fringe of the CBD
Ian Douglas, a director of valuers Herron Todd White Toowoomba, says Toowoomba’s commercial office market remains very tight with limited supply for offices beneath the $1 million mark.to experience firm yields even though the volume of sales is limited.
“The entry level office market has performed in line with the broader trend with a reduced number of transactions compared to the early 2020s,’’ he said.
“This appears to be largely driven by a reduced supply in the sub $1 million price range with the majority of properties in this price range typically converted dwellings in office or medical precincts and to a lesser extent some strata office suites in fringe CBD locations. “
“A prospective buyer can expect to pay $750,000 to $1 million for entry-level, freestanding office accommodation in Toowoomba and there appears to be strong demand for both leased and vacant properties.
“The properties that have transacted in 2025 typically did so with yields of 5.50% to 6.50% with no tangible difference between leased and vacant properties.”
Mr Douglas said prospective tenants were tending to purchase office accommodation rather than lease.
“A common option for purchasers, predominantly owner-occupiers, is to source residential properties in suitable CDB fringe office or medical precincts and either redevelop the site or refurbish as office accommodation,’’ he said.
“If there is a weakness in the local office market it has been properties with larger lettable areas within or around the CBD.
“Few local businesses require lettable areas in excess of 400 square metres, and this segment is seemingly lagging behind the broader market.”