Retailers remain cautious about expanding or relocating, given the current economic headwinds

• In Queensland, retail turnover increased 0.8% month-on-month in August 2024. Seasonally adjusted retail turnover reached AUD 7.5 billion in August, an increase of 2.3% year-on-year.
• Interest from fashion retailers has continued in the quarter, both within the CBD and Near City precincts. Established hospitality groups from other Australian cities have expanded in Brisbane and additional restaurant operators are seeking to enter the market.

Queens’ Wharf Casino opens its doors, but retail spaces remain unoccupied

• The 40,000 sqm development of Queens’ Wharf Casino has reached practical completion over Q3 2024. Some restaurant tenants have secured space, while retail at street level is vacant. No other completions were recorded over the quarter.
• The supply pipeline of new retail developments remains subdued in South-East Queensland, given the elevated costs of construction impacting new retail projects.

Rental increases in all retail sub-sectors (excluding other retail) and yields remain stable

• Rent growth in South-East Queensland has commenced, given positive re-leasing spreads. Large Format Retail increased most notably by 1.5% in the quarter, followed by Neighbourhood and Sub-regional at 1.3%. Regional rental growth was 1.0% q-o-q, and 0.5% q-o-q for CBD prime rents.
• Yields have held stable in Q3 2024, but year-on-year softening of 25 bps was recorded in the Sub-regional and Neighbourhood retail sub-sectors.

Outlook: Retail completions to remain low

• Yield softening in South-East Queensland is approaching its cyclical peak, and this could increase transaction volumes in the coming quarters.
• Positive rental increases are likely to continue in South-East Queensland, given the improvement in sales productivity.