APPD Market Report Article
SE Queensland
May 26, 2024Andrew Quillfeldt, Head of Capital Markets Research, Australia
0.5%
AUD 1,487
Rents
Stable
No shift in rent conditions among retail sub-sectors
- Annual retail trade continued to trend downwards in Queensland (1.4% y-o-y). Cost of living pressures are impacting consumption in 2024 as monthly retail trade growth for February was down -0.5% m-o-m, from 0.9% in January.
- Interest from retailers has remained stable, but leasing finalisation is experiencing delays. Food and Beverage tenants have pre-committed to a CBD development (Queen’s Wharf Casino) which is currently under construction.
Two new neighbourhood centres reach completion
- Two new neighbourhood centres reached completion, both anchored by national supermarket chains. The refurbishment of a sub-regional centre (Australia Fair) completed at the Gold Coast.
- In SE Queensland, 91,000 sqm of new retail is currently under construction, set to reach completion in 2024.
The Neighbourhood median yield softens over the quarter
- Rents were unchanged over Q1 2024.
- Neighbourhood upper yields softened 25 bps to range between 5.50%–7.50%.
Outlook: Moderate rent growth expected in 2024 for some sub-sectors
- Consumers are likely to reduce discretionary spending in the near term, as inflated pricing and high lending costs dampen household disposable income.
- Small rent growth is forecast in some sub-sectors across SE Queensland. Expanding construction costs remain an obstacle to project feasibility; higher rents will be required to construct new retail space.