The Bank of Queensland Limited (ASX: BOQ) share price is up 0.23% today to $8.85. One reason this may be happening is the regional bank signing a new lease with AMP Ltd (ASX: AMP) subsidiary AMP Capital.
AMP is not having such a hot day on the market. As of writing, the company's share price is down 1.58% to sit at $1.44.
For comparative purposes, the S&P/ASX 200 Index (ASX: XJO) is down 0.21%.
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The deal
The Sydney Morning Herald (SMH) is reporting the bank has signed a 10-year lease to move its head office in Sydney to 255 George Street. The deal covers 4 floors and includes the building signage.
The building is already home to Bank of Queensland subsidiary Virgin Money Australia. The move will bring the two companies under one roof for the first time. It is currently undergoing a redevelopment.
AMP Capital head of real estate, Kylie O'Connor, said the agreement with the Bank of Queensland highlighted "the importance of workplace accommodation for collaboration."
Bank of Queensland's chief financial and chief operating officer Ewen Stafford told the SMH: "In selecting the right space to bring our multi-brand teams together in the one location, we wanted a building that provided a market-leading level of amenities to our people,"
He added: "As more of our people return to the workplace, and with the pandemic changing the way we do business, we're looking forward to collaborating in new ways and our future home at 255 George Street will purposefully serve our future workplace needs and allow us to prosper."
The high office building vacancy rate
SMH is reporting the national office vacancy rate is 11.7% – its highest level in 24 years. The Australian Financial Review (AFR) has the rate in the Sydney CBD at 8.6%. That's up from 5.6% in the previous reporting period and the 3.9% rate recorded pre-COVID pandemic.
The premium-grade office vacancy rate rose to 6.2% while A-grade vacancy more than doubled to 9.7%.
To further compound the already suppressed office building market, approximately 110,000 new square metres of office were built in the Sydney CBD. Increasing supply and decreasing demand means lower rental rates.
AMP and Bank of Queensland share price snapshots
Just last week, the Bank of Queensland achieved its 52-week share price record of $9.44. The last time the bank broke its 1-year record was 1 week prior.
AMP's 52-week record of $1.97 was last achieved in June 2020. Since then, the AMP share price has valleyed and troughed. AMP is currently in the process of selling most of its business.
The Bank of Queensland has a market capitalisation of $4.8 billion, while AMP's is $4.9 billion.
