Queensland Commercial Property Weekly Wrap-Up

Week Ending 01 May 2025

The Brisbane commercial market continues to demonstrate resilience, characterised by strategic consolidation in the development sector and a "flight-to-quality" in the office and retail markets (Herde, 2026). While the RBA has maintained a "higher-for-longer" cash rate of 4.10 per cent since March, investor sentiment remains positive, particularly for assets with strong fundamentals or high-growth potential in tightly held precincts (Robin, 2026).

This Week’s Highlights

Development - South Brisbane Luxury Consolidation

Levvel Property Group has executed a significant consolidation play, acquiring two adjoining sites for a total of $21 million. The group paid $15 million for the 1,822 sqm Browning Street site and $6 million for the 910 sqm O'Connell Street site. This strategic merger improved the combined site yield by 50 per cent. Plans have been lodged for a 10-storey project featuring 92 high-end boutique dwellings, doubling down on the precinct following the success of their nearby Atelier project (Herde, 2026).

Office - Potential $700m CBD Divestment

Dexus is reportedly testing the market for its premium 34-storey office tower at 480 Queen St with a price tag exceeding $700 million. The asset, which has a book value of $700 million, features large 2,800 sqm floor plates and premium end-of-trip facilities. This potential sale aligns with the company's capital recycling strategy as it progresses with the $2.5 billion Waterfront Brisbane development (Herde, 2026).

Retail & LFR - Major Mitchelton Lease

Choice the Discount Store has secured a 1,112 sqm large-format retail tenancy at Shop 1-3, 177 Osborne Rd on a 10-year lease with options. The deal reflects a gross annual rent of $389,000 plus GST. The campaign saw significant demand, attracting 78 inquiries and seven formal offers, highlighting the scarcity of quality large-format space on Brisbane’s northside (Herde, 2026).

Retail - Noosa Heads Investment

A private investor has acquired a 723 sqm retail centre at 1 Arcadia St for $9.4 million following a competitive EOI campaign. Despite initial investor concerns regarding the building's age and upcoming lease expiries, the asset sold on a 5 per cent yield. The property includes 10 diverse tenancies and triple street frontage in a commanding Noosa Heads position (Herde, 2026).

Industrial - Banyo Modern Fitted Suite

A 275 sqm modern office and warehouse tenancy at 7/10 Depot Street has been leased for $68,750 per annum plus outgoings and GST. The property includes a 95 sqm ground floor office, a 150 sqm first floor office, and a 30 sqm warehouse component. The tenancy features seven exclusive car spaces and a 47 sqm exclusive external courtyard (Realcommercial, 2026).

General News

• Queensland has made its 50c-a-trip public transport trial permanent. While this supports commuter patronage, experts suggest it may impact the long-term business case for new infrastructure projects by reducing fare recovery ratios (Robin, 2026).
  Impact: Increased patronage supports foot traffic for transit-oriented retail, but may constrain future government capital for network expansions.
  From a retail perspective, the scheme acts as a significant driver for foot traffic within transit-oriented developments (TODs), as the drastically lowered cost of commuting encourages higher patronage across the network. This increased flow of people directly enhances the value proposition for ground-floor retail and service-based tenancies located near major hubs like South Brisbane, Fish Lane, and the CBD.
  However, the "Impact" note highlights a growing concern among economists and consultants regarding the "fare recovery ratio", the proportion of operating costs covered by commuter fares. By making fares almost free, the government must cover approximately $12.50 for every additional trip induced, according to LEK consultants. For the commercial industry, this creates a potential "funding gap" for future infrastructure. When fare revenue is negligible, it becomes harder for the state to justify the business case for new, multi-billion-dollar projects like further Metro expansions or heavy rail upgrades, which are traditionally the primary catalysts for long-term commercial land-value appreciation
  
  
• The RBA maintained the cash rate at 4.10 per cent in its most recent meeting. Market analysts note that while rates are stable, the "higher-for-longer" outlook continues to influence yield expectations across core assets (Robin, 2026).
  Impact: Investors are prioritising assets with strong income security and rental growth potential to offset debt costs.
  
  
• Infrastructure projects like the $2.5 billion Waterfront Brisbane are progressing, with expected completion in 2028 (Herde, 2026).
  Major construction activity continues to revitalise the CBD, attracting offshore capital and reinforcing Brisbane's status as a top-tier investment destination.

Final Take

The Queensland market is currently defined by a high level of competition for quality assets across all price points. Whether it is a $9.4 million retail strip or a $700 million office tower, the common thread is a strong appetite for properties with reliable fundamentals and quality locations. This suggests high investor confidence in the state's medium-term economic outlook despite broader national headwinds.

References

Herde, C. (2026, April 24). Developer doubles up. The Courier-Mail.

Herde, C. (2026, April 24). Investor buys into Noosa. The Courier-Mail.

Herde, C. (2026, April 24). Expanding discount chain secures Choice retail lease. The Courier-Mail.

Realcommercial.com.au. (2026). 7/10 Depot Street, Banyo, Qld 4014. https://www.realcommercial.com.au/leased/property-7-10-depot-street-banyo-qld-4014-504934320

Robin, M. (2026, April 23). Why free public transport is a terrible idea. The Australian Financial Review.

The Courier-Mail. (2026, April 24). Leases. The Courier-Mail.