In the last half of 2023, Brisbane’s Central Business District (CBD) saw a slight tightening in its retail vacancy rate, dropping from 19.5% in the first half of the year to 18.7%. Despite this improvement, it remained one of the highest among Australia’s major cities. Yet, this high vacancy rate might be seen as an opportunity rather than a challenge for businesses looking for retail space.

The retail market in Brisbane’s CBD has remained resilient despite its challenges. Key factors, such as a solid return to office, strong population growth, and a steady improvement in international tourism, have all contributed to this resilience.

One trend to note is the so-called “tenant flight-to-quality”. This refers to tenants’ preference for high-quality spaces in prime locations, which can accommodate flagship stores and attract more foot traffic. Tenants previously occupying lower-grade arcade space are now focusing on site fundamentals that offer better exposure.

In addition to these trends, numerous redevelopments are underway in Brisbane’s CBD, which are set to revitalise the area and potentially further tighten retail vacancies. These include revitalising key retail hubs like the Eagle Street Pier and introducing new retail space in developments like Queen’s Wharf.

The underground arcade of Post Office Square is also undergoing redevelopment, expected to increase demand for new food retail tenants, particularly for quick-service restaurant space.

Taking Advantage of High Vacancy Rates

Although a high retail vacancy rate might seem like a negative indicator, it can present opportunities for businesses looking to secure retail space in prime locations. With a higher vacancy rate, landlords may be more willing to negotiate lease terms and rates, offering potential tenants better deals than in a tighter market.

Despite the high retail vacancy rate and cost-of-living pressures, the overall outlook for Australia’s 2024 retail landscape remains positive. Retail sales in Australia were near $425 billion in 2023, demonstrating the strength and resilience of the sector.

Brick-and-mortar spaces are highly desirable for retailers seeking to establish vibrant and innovative brand identities. The wellness sector, cafes, and restaurants have reported the strongest sales.

Source

• The Urban Developer Report on Retail Trends: https://www.theurbandeveloper.com/articles/retail-boom-melbourne-office-sector-lags
• API Magazine on Retail Vacancy and Trends: https://www.apimagazine.com.au/news/article/how-brisbane-is-reshaping-its-retail-landscape
• CBRE Report on Retail Vacancy: https://www.cbre.com.au/news/cbd-retail-vacancy-tightening-across-australias-major-city-markets

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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According to recent reports, the Brisbane property market is expected to continue its upward trajectory in 2024. The housing market, in particular, has experienced a staggering 52% price growth since the onset of the COVID-19 pandemic, reaching a new peak.

Despite the impressive growth, property sellers are cautious in 2024, with new listings in Brisbane 17.8% lower than the previous five-year average. However, strategic investors and homebuyers actively seek opportunities to upgrade, indicating ongoing market activity.

Rental Market Challenges

Brisbane’s rental market faces historically low vacancy rates and soaring rents. Vacancy rates for houses and units stand at 0.9% and 1.0%, respectively, contributing to a 9.3% and 24.8% annual rent rise. The high demand for rental properties, driven by a migration surge, poses difficulties for tenants seeking affordable housing.

2024 Market Projections

ANZ Bank forecasts a substantial 9.0%-10.0% property price increase in Brisbane for 2024. The city’s property market is experiencing a dichotomy, with strong demand for detached houses in inner and middle-ring suburbs and lifestyle areas. Conversely, the demand for apartments remains softer, prompting a shift towards townhouses in the inner suburbs.

High-income households, less affected by living costs, are major contributors to housing demand. However, segments likely to underperform include apartments, blue-collar areas, and new housing estates facing financial strain and potential unemployment.

Liveability and Growth Factors

Liveability factors, including proximity to amenities, good schools, public transport, and job access, drive property demand. School zones, in particular, influence decision-making, highlighting the importance of education in the property selection process.

The influx of internal migrants, drawn by Queensland’s affordability and lifestyle, has played a pivotal role in the state’s robust property market. With population growth expected to continue, Queensland’s population may reach 8.27 million by 2046, fuelled by net overseas and interstate migration.

Queensland’s economic strength, marked by significant population growth, job market stability, and energy resource demand, made it the best-performing state economy in January 2023.

Various forecasts predict property price rises in Brisbane for 2024:

• ANZ: 9%-10%
• CBA: 6%
• NAB: 6.5%
• Westpac: 8%
• PropTrack: 3%-6%

These projections suggest continued growth, driven by strong population growth and limited housing supply, especially in desirable areas near the CBD and sought-after school catchment zones.

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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I am pleased to share the successful sale of a rare freestanding property located on a busy road in Brisbane’s northern suburbs. The property at 458 Enoggera Road, Alderley, was sold for $2.25 million to a private investor after auction. The buyer was drawn to the property’s strong passive income potential and long-term development opportunities.

The single-level building is currently leased to Exercise Health Australia, a well-regarded tenant providing services to private, Medicare, DVA, WorkCover, and NDIS patients. Previously home to a Taubmans Professional Trade Centre, the property was extensively refurbished to suit its current use.

This property was part of a deceased estate portfolio auction that I had the privilege of marketing alongside my colleague, Gavin Moore. Another property in the portfolio, a Westpac-tenanted building in Roma, was also successfully sold to a Melbourne investor for $980,000, achieving a 9.1 percent yield.

Speaking about the Alderley property, Gavin highlighted its appeal: “This is a high-quality land holding with development upside. It also has a strong lease, making it an attractive option despite current challenges in the development market. It is a great opportunity to secure a prime asset in a sought-after precinct, generating excellent income for at least the next five years.”

The campaign for this property drew significant interest, with 43 inquiries and five active bidders at auction. The 678-square-metre building, set on a 1488-square-metre site, boasts two-street access and includes 14 car parking spaces. The sale was completed at a 5.6 percent yield.

I was particularly impressed by the strong interest from a variety of buyers, including commercial property agents. The buyer ultimately chose this asset due to its long-term potential in a well-known precinct and plans to hold it as a passive investment, with the added benefit of development upside in the future.

Brisbane’s office landscape has shown a remarkable turnaround and is expected to face a scarcity of prime-grade office spaces in 2024. The trend, a distinct “flight to quality,” reflects the national market’s inclination towards high-grade accommodations.

According to recent news reports, the exceptional performance of Brisbane’s office market continues to surpass expectations. Brisbane has exceeded its annual average with a significant absorption of office stock in the past year. The vacancy rate has also seen a noteworthy decrease from its previous high. This highlights an emerging issue: the potential for an under-supply in premium office spaces.

The strong pre-leasing activity in new developments demonstrates the burgeoning demand for quality office space. Consequently, rents for these prime spaces have escalated, reaching impressive figures per square meter. Modern corporates are increasingly willing to invest in premium accommodations for their workplaces.

With the upcoming Brisbane Olympics on the horizon, the Gabba stadium is expected to be a catalyst for growth in the city’s office market. The global event is expected to intensify the focus on developing ‘next level’ office infrastructures.

The shift in workplace dynamics due to the pandemic amplified the trend toward high-quality spaces. Employers are investing in prime real estate to offer more appealing work environments and to encourage employees to return to the office. Despite an overall vacancy increase, both prime and secondary-grade offices have seen rent growth through 2023.

This upward trend in the office market is consistent with the active leasing sector observed in other major cities. Rent improvements could enhance the appeal of well-managed assets and invigorate market segments.

Despite a slowdown in transaction activity due to investor caution reflecting the broader economic climate, the underlying strength in prime office markets like Brisbane’s remains evident.

As Brisbane gears up for the 2032 summer games, the city’s office market will likely demonstrate resilience, particularly within its premium office spaces. This represents a strategic opportunity for investors and businesses to navigate the evolving landscape.

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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The commercial office sector in Brisbane is navigating a period of uncertainty as 2024 unfolds, with the primary concern shifting towards decreasing sales volumes. This decline appears to be driven by macroeconomic factors, especially vendor and purchaser price expectations. Brisbane’s CBD is also witnessing decreased vacancy rates due to increasing occupancy.

In the wake of shifting dynamics post-pandemic, Brisbane is adapting to the evolving workplace environments. However, the uncertainty surrounding the broader economic climate has led to a slight dampening of investor enthusiasm. This could push investment yields upwards until a clearer view of rental yields and rent stabilisation emerges.

The market sent mixed signals in the recent past. Following the Covid lockdowns, there was an initial increase in activity as workers gradually returned to the office. Data from 2023 indicated a resurgence in the office sector, leading to a decline in transaction volumes by year-end.

Commercial property transactions across Brisbane reflected this trend, with a noticeable decrease in total sales value compared to previous years. Despite this downturn, some segments, like industrial properties, continue to attract investor interest due to limited construction activity and favourable supply-demand dynamics.

Retail investment within the city remains resilient, with significant transactions occurring in larger centres. However, the smaller market sectors, including strip malls and stand-alone retail outlets, are experiencing slower movement, partly attributed to the current interest rate environment.

Investors looking towards Brisbane’s office market are cautious but remain observant for potential rebounds. With the industrial sector maintaining its appeal and the retail space holding steady amid rate-driven hesitations, Brisbane’s overall commercial landscape presents challenges and opportunities as the year progresses. The focus for many will be on strategic investments that can weather the changing economic climate and capitalise on any market corrections.

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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In a competitive market where quality commercial properties are highly sought after, a rare freestanding property located at 458 Enoggera Road, Alderley, Brisbane, was brought to market as part of a deceased estate portfolio. The property, previously occupied by Taubmans Professional Trade Centre and extensively refurbished by Exercise Health Australia, attracted significant attention due to its strong lease agreement and potential for future development.

The Challenge

The property, positioned on a 1488 square metre site with two-street access and featuring a 678 square metre building with 14 car park spaces, was marketed when the commercial property market had yet to recover fully. Despite these challenges, the key objectives were clear:

1. Maximise Interest: Attract a wide range of potential buyers through a robust marketing campaign.
2. Secure a Sale: Ensure that the property sold at a competitive price, ideally offering a strong yield for the buyer.
3. Highlight Development Potential: Emphasise the property’s long-term development upside to appeal to investors looking for both passive income and future capital growth.

The Strategy

Gavin Moore and Guy Stafford of McGees Property led the marketing and sales efforts for the Alderley property. They executed a comprehensive four-week marketing campaign that successfully generated substantial interest, including 43 inquiries and five active bidders at auction. Their strategy included:

• Targeted Marketing: Leveraging their deep understanding of the local market, Moore and Stafford targeted local and interstate investors, focusing on those interested in properties with strong leasing arrangements and development potential.
• Highlighting Key Features: The team strategically highlighted the property’s prime location, existing lease to Exercise Health Australia, and significant refurbishment, making it an attractive proposition for long-term passive income.
• Auction Campaign: Despite a challenging market, the auction campaign was meticulously planned to ensure maximum visibility and competition among potential buyers.

The Outcome

The property sold after auction for $2.25 million to a private investor who was drawn to its dual benefits of passive income and long-term development potential. The sale realised a yield of 5.6 percent, reflecting the property’s strong value proposition in a recovering market.

The property features a substantial land size of 410m² and a building size of 130m². Situated in a district with Centre Zoning, the site benefits from high exposure and excellent signage opportunities, making it a desirable location for businesses. Its proximity to key amenities, including Griffith University, Greenslopes Private Hospital, and major shopping centres, adds to its strategic value.

Interestingly, our marketing strategy for this property was minimal, involving only a sign on the property with plans for broader marketing in 2024. However, the local market’s strength was evident as we received over 20 direct phone enquiries and 4 written offers. This overwhelming response is indicative of the high demand for quality commercial spaces in the area.

The property was purchased by a private owner-occupier, who plans to renovate and tailor the space for their established local business. This decision underscores the strategic potential that our clients see in properties we represent.

We believe this sale signifies a significant opportunity for property owners in the local area. With a number of qualified buyers actively seeking spaces, now is an excellent time to consider your property options for 2024. Whether you’re thinking of selling or simply exploring your options, our team at McGees Property is here to provide expert advice and tailored solutions.

Reach out to discuss your property goals. Our experienced team is ready to guide you through the dynamic property landscape, ensuring you make the most of the current market conditions.

Thank you for your continued trust in McGees Property.

We look forward to helping you achieve your property aspirations in the year ahead.

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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Looking to invest in commercial property in Brisbane in 2024? It’s a great time for investors like you to take advantage of some exciting opportunities. Plus, with the 2032 Olympic Games on the horizon, things are looking even brighter.

Keep your eyes on suburbs close to the city centre like Fortitude Valley, Milton, and Woolloongabba. These locations are not just close to the CBD, but they’re also known for their bustling commercial hubs and well-established infrastructure. And with the Olympics coming up, these areas are expected to improve in value and performance.

But before you jump in, here are some things to consider:

• Property Type and Location: Look for properties in inner-city or middle-ring suburbs with good infrastructure and essential amenities. If it’s a commercial space, easy access and closeness to transport and business centres can improve your returns.
• Potential Tenants: With the population set to grow, there will be a higher demand for commercial spaces. Properties near schools, transport hubs, and growing business districts could provide a steady stream of potential tenants and solid rental returns.
• Infrastructure Developments: The 2032 Olympics will bring a wave of infrastructure upgrades across Brisbane. Stay on top of these developments – they could lead to increased property values and capital growth.
• Market Dynamics: Don’t forget to do your homework! Check out supply and demand trends, vacancy rates, and rental trends. Understanding these details will help you acquire the best commercial assets and make smarter investment decisions.

South East Queensland’s robust economy, growing population, and upcoming infrastructure boom from the Olympics make it desirable for commercial property investment in 2024. But remember, success comes from thorough research and understanding market trends. Need further advice? We’re here to help! Get in touch with the team at McGees Brisbane today.

Image via Pixabay

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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As 2024 begins, the changing financial markets we faced in 2023 are still with us, especially as interest rates are likely to remain higher for longer. This situation is proving tricky for investors and developers who are feeling the pinch of mortgage stress.

The pressure isn’t just about interest rates either. Since the pandemic, costs for construction, maintenance, land taxes, and insurance have all shot up. Those who have investments in growing sectors like housing or retail might be able to weather the storm, but others are finding the investment terrain increasingly tough, weighed down by regulatory pressures and reduced returns.

Developers are also under pressure. The increased cost of borrowing has sent ripples through the industry, making financing for new projects more expensive. This surge in borrowing costs has compelled developers to revisit their financial projections and project budgets, challenging the feasibility of proposed developments.

Additionally, with mortgages becoming more expensive, potential buyers are hesitating, leading to a decline in demand for new properties. Meanwhile the rise in materials costs means some developers are backing out of big projects, while others are facing delays.

Adding to the sector’s challenges are looming regulations and bureaucratic roadblocks. Expected changes in industrial relations and tax could have a significant impact on the building and construction industry.

Without a doubt, 2024 calls for resilience and adaptability. At McGees Property, we’re focused on steering our way through these complexities, pinpointing opportunities, and ensuring our clients prosper in this changing landscape.

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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Just like Brisbane, the Gold Coast has seen a few key factors pushing property prices to new highs in 2023:

· Population Growth: The Gold Coast keeps attracting more residents, especially people moving from other states and retirees.

· Affordability: Property prices on the Gold Coast are still relatively affordable.

· Residential Rental Yields: Over the past three years, rental yields have jumped by +38%, drawing in investors looking for stable returns.

· Infrastructure Investments: Big projects like the light rail expansion and the Cross River Rail project are making the Gold Coast an even more attractive place for property investors.

If you’re thinking about investing in commercial properties on the Gold Coast in 2024, here are our top suburbs for investment this year:

Robina: The Commercial Powerhouse

Robina is a buzzing commercial hub that’s attracting businesses and investors alike. Thanks to its central location, great transport links, and modern infrastructure, it’s become a magnet for entrepreneurs and commercial enterprises. Plus, the Robina Town Centre is a bustling shopping and entertainment precinct that adds to the suburb’s commercial appeal.

Robina’s versatility makes it a standout. It caters to a range of commercial ventures, including office spaces, retail outlets, and healthcare facilities. And with easy access to Bond University and robust transport links, it’s a great place for businesses to set up shop.

Southport: The Business District on the Rise

Southport has transformed from a quaint seaside town into a thriving urban precinct. Its waterfront location, proximity to major attractions, and ongoing revitalisation initiatives make it a hotspot for commercial investment.

The growth of Southport is powered by developments like the Health and Knowledge Precinct and Gold Coast’s Chinatown. The suburb offers a vibrant mix of healthcare facilities, education centres, dining options, and retail outlets, making it an attractive option for commercial investors.

Surfers Paradise: The Tourist and Commercial Hub

Surfers Paradise is an iconic destination known for tourism, entertainment, and commercial buzz. Its beachfront locale, stunning skyline, and array of entertainment options attract both tourists and businesses.

Investors can find diverse commercial opportunities in Surfers Paradise, including hospitality ventures, entertainment establishments, and retail outlets. Thanks to its international popularity and constant foot traffic, it’s a prime spot for commercial spaces catering to the tourism and leisure sectors.

Burleigh Heads: The Bohemian Business Hub

Burleigh Heads combines a laid-back coastal vibe with a thriving entrepreneurial spirit. With boutique stores, quirky cafes, and a growing creative scene, it’s a great place for businesses looking for a unique, community-centric atmosphere.

Burleigh Heads’ transformation into a cultural and culinary hotspot has caught the eye of investors. Commercial opportunities include artisanal cafes, boutique shops, co-working spaces, and lifestyle-focused ventures that cater to the area’s affluent and culturally diverse demographic.

Broadbeach: The Lifestyle and Entertainment Epicentre

Broadbeach perfectly blends entertainment, dining, and coastal living. Its upscale ambiance, proximity to beaches, and entertainment options make it a hit with both residents and tourists.

Commercial prospects in Broadbeach revolve around lifestyle-driven enterprises, including upscale dining establishments, entertainment venues, boutique retail outlets, and luxury accommodation options. With its cosmopolitan appeal and steady stream of visitors, it offers a lucrative market for commercial investors looking to capitalise on the area’s leisure-centric vibe.

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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