APPD Market Report Article

SE Queensland

May 26, 2024

Andrew Quillfeldt, Head of Capital Markets Research, Australia


AUD 1,487


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.

Note: SE Queensland Retail refers to South East Queensland's overall retail market.

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