The phrase "Survive to '25" has gained attention, particularly in European and US commercial real estate discussions but it resonates with the current challenges facing Brisbane’s CBD retail market. As of June 2024, the city’s retail vacancy rate sits at 19.2%—the second highest in Australia, following Perth at 25.0%, (CBRE Research, August 2024).
In Brisbane, retail spending has been largely suburban based, with only 10.8% of total retail and food and drink transactions taking place in the CBD, according to Square Data, (Square, August 2024). By contrast, Melbourne sees 69% of its retail spending concentrated in the city centre, highlighting a unique decentralization in Brisbane’s market.
The Brisbane CBD historically drew visitors from the outer suburbs seeking exclusive retail experiences, acting as a destination shopping area. More recently, major suburban shopping centres like Chermside, Mount Gravatt, and Indooroopilly—with ample free parking—have become formidable competitors for inner-city shops. Additionally, the post-pandemic shift toward Work from Home and hybrid setups has reduced foot traffic in the city, challenging CBD retailers further. City shopping centre hubs such as “Uptown” and “MacArthur Central” have shown the highest vacancy rate in H1 2024 (30.2%), whereas non-core areas such as Creek Street (3.9%) or Wharf Street (0%) had a significantly tighter vacancy rate.
Source: CBRE Research, August 2024
From a recent assessment we completed we saw optimism for a potential recovery in CBD retail. Experienced operators with strong value propositions continue to perform well despite the current climate, and if vacancies remain high, effective rents may adjust, aligning with market demand. Below is a snapshot of some recent retail lease transactions completed in the Brisbane CBD:
|
Address |
Tenant |
Area |
Gross Face Annual Rental ($/m²) |
Term |
|
570 Queen Street |
Hats on Queen |
300 |
450 |
3 yrs |
|
79 Adelaide Street |
Maniax Axe Throwing |
650 |
600 |
10 yrs |
|
195 Elizabeth Street |
Alice Bar |
225 |
675 |
10 yrs |
|
199 Elizabeth Street |
Milquetoast |
100 |
750 |
5 yrs |
|
34 Burnett Lane |
Hideki |
100 |
1,225 |
5 yrs |
|
293 Queen Street |
Hustle N Grind |
50 |
1,300 |
2 yrs |
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