APPD Market Report Article

SE Queensland

February 22, 2024

Andrew Quillfeldt, Head of Capital Markets Research, Australia


AUD 1,485


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. 

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

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