Apex North Property Group quietly settled on a 1,200-square-metre commercial holding on Spence Street in early June, paying $3.1 million for a mixed-use block that has sat largely dormant since its previous tenant, a regional logistics firm, vacated in late 2024. The purchase is the third Cairns CBD acquisition the company has made in eighteen months, and it signals something the broader Australian office market hasn't quite figured out yet: that the flight-to-quality story is very much alive outside Sydney and Melbourne, if you know where to look.
The timing matters because national data released by the Property Council of Australia in May put the average CBD office vacancy rate across non-capital regional centres at 14.2 per cent — the highest it has been since 2002. Cairns sits marginally better at around 11.8 per cent, according to figures compiled by CBRE's Cairns office, but that headline number obscures what is actually a two-speed market. Grade-A boutique space with fibre, end-of-trip facilities and flexible lease terms is effectively sold out. Everything else is collecting dust.
Spence Street and the Boutique Play
Apex North's managing director has spoken at Cairns Regional Council business forums about the logic of the strategy, consistently pointing to the precinct between Shields Street and Aplin Street as the city's most overlooked commercial corridor. The firm's first two conversions — a 420-square-metre fitout on Lake Street completed in March 2025, and a smaller 280-square-metre suite above a Grafton Street retail tenancy finished last October — are both fully leased, largely to professional services firms and two digital-economy businesses that relocated north from Brisbane. Combined, those tenancies are generating gross face rents of around $480 per square metre per annum, which is roughly 35 per cent above the Cairns CBD average for secondary stock.
The Spence Street project is more ambitious. Plans lodged with Cairns Regional Council in May show four individual suites ranging from 180 to 320 square metres, each with separate street-level access, private meeting rooms and a shared rooftop terrace. Construction is scheduled to begin in September, with practical completion targeted for the second quarter of 2027. The estimated fitout cost sits at $1.4 million, meaning Apex North is all-in at roughly $3,750 per square metre — a number that makes sense only if those premium face rents hold.
Why Cairns, Why Now
Several forces are converging to make this bet less speculative than it looks. Cairns Airport handled 5.4 million passengers in the 2025-26 financial year, a record, and the hospitality and tourism sector that underpins so much of the local economy has been dragging professional services businesses — accountants, lawyers, architects, environmental consultants — into the city in larger numbers. The Cairns Convention Centre has a booked-out calendar through to mid-2027. Each major event anchors weeks of ancillary economic activity, some of which converts into longer-term office demand.
Nationally, the race to secure industrial land for AI data centres — a pressure that economists have flagged as a driver of broader commercial property inflation in southeast Queensland and New South Wales — has not yet hit Cairns with the same force. That gives local operators a window. Land in the Portsmith industrial estate is still trading at prices that look almost archaic compared to equivalent zoned land south of Brisbane. The comparative affordability is itself an attractor for businesses weighing a northern expansion.
For other Cairns commercial landlords sitting on secondary stock, the lesson from Apex North's model is fairly blunt: passive ownership of B-grade space is a losing strategy. The firms winning leases right now are the ones investing in the physical product — acoustic ceilings, upgraded HVAC, gigabit connectivity — and structuring leases with genuine flexibility rather than locking tenants into five-year terms that suited a 2015 market. The city's next eighteen months will reveal whether one company's conviction is a blueprint or just an expensive experiment on Spence Street.
