Rents remain stable across all sub-sectors

• Retail spending growth rose 2.2% in Queensland over the month to November 2023, just above the national average of 2.0%. Consumers are feeling the cost-of-living pressures and prioritising the essentials, with discretionary expenditure decreasing by -0.2% and non-discretionary expenditure increasing by 4.1% on a y-o-y basis.
• The disconnect between landlords and tenants is slowing deal finalisation, but there is ongoing interest in available spaces across all sub-sectors. Anecedotally, the CBD is experiencing an influx of enquiries, especially from luxury retail and international brands.

One retail asset expansion reaches completion

• The expansion to the Distillery Road Market reached completion in the quarter, adding 11,000 sqm of retail space to the market.
• Supply additions in 2023 totalled just 66,600 sqm, well below the historic average of 121,000 sqm.

Sub-regional and neighbourhood yields soften over the quarter

• All sub-sector rents remained stable over the quarter.
• Sub-regional and neighbourhood yields softened by 25 bps and 13 bps respectively. All other sub-sectors yields remained stable over the quarter. 

Outlook: Retail supply to remain subdued in the medium term

• Retail turnover growth is expected to moderate throughout the first half of 2024, given heightened cost-of-living pressures. 
• Retail completions across most sub-sectors are expected to remain subdued in the short to medium term, with only 82,900 sqm currently under construction and forecast to reach completion in 2024.