Brisbane’s Struggle and Signs of Renewed Interest

According to the AFR, Brisbane’s Logan Hyperdome mall, listed at $700 million, failed to secure a buyer, highlighting the disconnect between seller and buyer expectations. This led to a reset in local shopping centre values, causing some assets to be withdrawn due to pricing ambiguity. However, glimmers of activity from other big players like Lendlease hint at a potential upswing in transactions.

Gold Coast’s Resilience versus Supply Challenges

Despite the Gold Coast’s economic strength, marked by growth, population surges, and thriving tourism, it grapples with a critical supply issue. While the region has a thriving economy, there is also a severe shortage in new property development due to exorbitant construction costs, up 44% since 2020. The mismatch between demand and supply looms large as a hurdle.

Sunshine Coast: Softening Amid Economic Headwinds

On the Sunshine Coast, economic headwinds and escalating interest rates have softened the retail market. Entry-level retail properties, particularly in hinterland areas, predominantly attract owner-occupiers, while investor interest remains muted due to economic uncertainties.

Amidst these fluctuations, entry-level retail properties maintain their allure due to stable rental incomes, despite inherent risks tied to market volatility, tenant quality, and potential capital expenditures. Pricing dynamics fluctuate significantly based on location, significantly impacting the investment threshold for potential buyers.

Looking Ahead: Navigating Uncertainties

Predictions for 2024 point toward continued price corrections at varying rates across sectors and regions. Aligning vendor expectations with the market is essential for fostering transactional momentum. Stability in interest rates and an economic recovery might rekindle investor confidence, potentially triggering increased transactions, particularly in prime locations boasting strong retail line-ups.

While uncertainties and challenges persist, the potential for recalibrated pricing, coupled with more stable economic conditions, offers hope for increased market activity in the coming year. Navigating these fluctuations intelligently might offer opportunities for investors to capitalise on the diverse retail property 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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Brisbane: Navigating Uncertainty Towards Stability

Brisbane’s commercial property market has weathered a turbulent period, facing inflationary pressures and uncertainty around interest rates. This instability has led to softening yields, impacting transactional volumes. However, a shift is anticipated as higher yields create a more favourable entry point for investors, potentially yielding higher returns.

Despite challenges, well-located office assets with strong fundamentals have seen healthy tenant demand and rental growth, particularly in A-grade and B-plus grade spaces. Tenant preferences are leaning towards pre-fitted accommodations to avoid volatile construction costs.

The market’s resilience against uncertainty positions it reasonably well compared to other regions. Once economic stability is attained, Brisbane’s office market is poised to rebound quickly.

Gold Coast: Riding the Wave of Demand and Limited Supply

The Gold Coast office market has experienced a strong rebound owing to substantial migration and increased business activity. With demand surpassing available floor space, vacancy rates have decreased significantly, fuelling a surge in rental rates and a reduction in incentives.

Limited new developments due to high building costs have added to the supply-demand imbalance. Despite minor supply additions, the market remains under pressure, fostering a preference for renovated, modernised buildings. This scarcity has made office assets more attractive to private investors, albeit still seeking softer yield levels due to increased debt costs.

Recent transactions, while limited, have shown promising trends, with high-profile acquisitions reflecting market resilience.

Sunshine Coast: Sustaining Growth Amidst Limited Supply

The Sunshine Coast’s office market stands out with one of the lowest vacancy rates in Australia, driven by strong economic conditions and strong tenant demand. Rental rates have improved, though there has been a slight increase in incentives due to higher absorption rates.

The smaller office market, driven by owner-occupiers, faces limited supply of strata stock, increasing demand for future developments. The completion of key projects like the A1 Building has boosted the market, with further developments anticipated in the Sun Central precinct.

Rising interest rates have softened yields, reshaping investor preferences. Despite this shift, demand for office space remains stable, underlining the region’s potential for sustained growth.

In the end, 2024 presents a landscape of opportunities and challenges across the local commercial office markets. While each region faces its unique dynamics, adaptability and strategic investment remain pivotal.

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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Brisbane’s Industrial Market: A Balancing Act

In the second quarter of 2023, Brisbane’s industrial market saw a rise in vacant space by 15%, reaching 261,166m2. While take-up slightly eased during this period, rental growth remained promising, with prime rents growing by 3% over Q2 2023 and an annual growth of 24%.

Despite this growth, demand for industrial spaces remains strong. However, high construction costs and inflation pose challenges for developers, impacting project feasibility.

Gold Coast’s Resilience and Investment Potential

The Gold Coast’s industrial sector, dominated by SMEs, sustained strong conditions despite economic headwinds. Over 80% of industrial transactions fell in the sub $5 million price bracket, maintaining investment yields of sub 6%.

Rental rates surged, and land constraints and strong demand have kept prices firm. Though, some slowing in man-cave/self-storage strata development is noted, with a shift towards traditional industrial units.

Sunshine Coast’s Steady Demand and Owner-Occupier Dominance

Sunshine Coast’s industrial market displayed resilience due to constrained supply, sustaining owner-occupier activity for smaller strata-titled units and standalone assets. Escalating construction costs and limited land supply have redirected buyers towards existing properties rather than pursuing new developments.

While investment interest softened, rental rates continued to improve due to low supply levels and consistent tenant demand.

Forecasts for 2024: Challenges and Potential Adjustments

Despite challenges in construction feasibility and rising costs, Brisbane’s industrial market is set to witness continued rental growth. Gold Coast’s strong investment potential may see moderate adjustments in certain development segments, while Sunshine Coast’s reliance on owner-occupier activity could shape the market’s dynamics.

As developers recalibrate project feasibility amidst rising costs, the region may experience a slowdown in new supply entering the market. However, strong demand, particularly from owner-occupiers, might keep rental rates buoyant. The potential moderation in vacancy rates could alleviate scarcity, providing more options in the leasing market.

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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Larger projects include Brisbane Live, an 18,000-seat arena dedicated to bringing top-tier entertainers to Brisbane from Australia and beyond, as well as the Queen’s Wharf Development (see our article on What’s Happening Around Brisbane River).

Source: Cross River Rail

Brisbane’s Transformation for the 2032 Olympics

When Brisbane was selected as the host for the 2032 Olympics, the Australian Government committed more than $5 billion to the project and the City of Brisbane and the Queensland Government has set about taking steps to accommodate thousands of athletes and millions of Olympics fans from all over the world.

Some of these developments include the construction of six brand-new venues, including the swimming centre of the Olympics. The new 15,000-seat Brisbane Arena. Additionally, an important upgrade will be made to add seating to the Brisbane Cricket Ground, which will serve as an outdoor running sports ground throughout the Olympics, with a vision for the future beyond 2032.

Other developments for the Olympics include the construction of four Olympic “villages”, with the central Brisbane Olympic Village hosting 10,700 athletes and three other ‘satellite’ villages.

Additionally, Brisbane’s already vibrant arts scene will receive a huge boost of $175M for an expansion to the Queensland Performing Arts Centre, enabling an additional 1,500 seats to bring more people to Brisbane’s artsy joie-de-vivre to a wider audience.

Brisbane has plenty of new developments to be excited about, an exciting prospect for 2024, 2032, and beyond.

Impact on the Economy

The various infrastructure projects in Southeast Queensland, particularly those tied to the 2032 Brisbane Olympics, are set to have a significant and multifaceted impact on the local and national economy. The influx of investment—both public and private—into these developments is expected to create substantial economic growth through several key channels:

1. Job Creation: The construction and development of new infrastructure, including the Brisbane Live arena, the Queen’s Wharf precinct, and the Olympic venues, will generate thousands of jobs. These include direct employment in construction, engineering, and related fields, as well as indirect employment in industries such as hospitality, retail, and tourism.

2. Tourism Boost: The Olympics and the associated infrastructure will likely draw millions of visitors to Brisbane, both during the event and in the lead-up to 2032. This will boost the tourism industry, contributing to increased revenue for hotels, restaurants, transportation services, and local attractions. The expanded Queensland Performing Arts Centre and other cultural initiatives will also help position Brisbane as a year-round tourist destination.

3. Increased Investment: The commitment of over $5 billion from the Australian Government for Olympic preparations is just the beginning. This public investment is likely to attract further private investment into the region, leading to new business opportunities and the potential for more global companies to establish a presence in Southeast Queensland.

4. Real Estate Development: The construction of new venues and the Olympic villages will spur demand for both residential and commercial real estate. The Olympic villages, in particular, could be repurposed post-Games, potentially providing new housing or commercial spaces that can cater to the growing population.

5. Long-Term Economic Growth: The infrastructure improvements made in preparation for the Olympics will have lasting benefits. Enhanced transportation networks, including upgrades to the Cross River Rail and road systems, will improve efficiency and connectivity, making Brisbane more attractive to businesses and residents alike.

Impact on Commercial Property

The influx of infrastructure development and the economic activity surrounding the 2032 Olympics will significantly impact the commercial property market in Southeast Queensland. Key impacts include:

1. Rising Demand for Commercial Space: As new businesses set up shop in anticipation of the Olympics and the subsequent increase in tourism, the demand for commercial real estate—such as office spaces, retail locations, and hotels—will rise. This could lead to higher rental yields and increased property values in key areas, particularly in the Brisbane CBD and surrounding neighborhoods.

2. Development of New Commercial Hubs: The Olympic-related developments will likely lead to the creation of new commercial hubs, particularly around the Olympic venues and villages. These areas will attract businesses that want to capitalize on the increased foot traffic and visibility, leading to the growth of new business districts within Southeast Queensland.

3. Increased Redevelopment Projects: Older commercial properties may see a surge in redevelopment as owners and investors seek to modernize and capitalize on the rising demand for updated, high-quality spaces. This could result in a wave of refurbishments and new constructions, further transforming the commercial landscape.

4. Long-Term Leasing Opportunities: With the anticipated growth in tourism and population, there will be a long-term demand for retail and hospitality spaces, especially in areas with direct access to Olympic venues. Investors in commercial properties may find lucrative leasing opportunities as new businesses seek to establish themselves in prime locations.

5. Potential Market Saturation Post-Olympics: While the lead-up to the Olympics will likely see a boom in the commercial property market, there is also a potential risk of oversupply post-Olympics, particularly if speculative developments outpace actual demand. Investors and developers will need to carefully consider long-term sustainability when planning projects.

Research and Resources

For further research and detailed data on the impact of Southeast Queensland projects on the economy and commercial property market, you can refer to the following sources:

• Infrastructure Australia’s Reports: Provides detailed insights and reports on infrastructure development and its economic impacts across Australia, including Queensland.

• Queensland Government’s Infrastructure Program: Offers information on ongoing and future infrastructure projects, including those related to the Brisbane Olympics.

• Property Council of Australia: A source for the latest trends and analysis in the commercial property market across Australia, including impacts of large-scale infrastructure projects.

• Urban Development Institute of Australia (UDIA): Offers reports and insights on urban development and its effects on property markets in Southeast Queensland and beyond.

These resources should provide you with a comprehensive understanding of the economic and commercial property implications of Southeast Queensland’s ongoing and future projects.

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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Following a spectacular 9.1% price increase since January 2023, many are wondering whether the city can keep up this increase by January next year, and whether it will see an even greater price increase well into 2024. As Brisbane broke Bloomberg’s national projections of 7.7% in January 2023, it isn’t expected to stop anytime soon.

Factors Fuelling Brisbane’s Property Price Rises

Due to various factors, Brisbane’s property prices have been in a ‘boom’ phase. The Reserve Bank of Australia recently raised the interest rates to 4.35%, after several months at 4.1%. (This made housing affordable for first-time buyers and increased confidence in housing as a profitable and worthwhile investment.) The effects of the latest rise, however, are yet to be seen.

In more recent news, the Queensland Government doubled the First Home Owner’s Grant to $30,000. Experts believe this will increase house prices even further.

Other factors contributing to price increases include a high migration rate into Brisbane from elsewhere in Australia and the world. While outgoing inquiries for Brisbane were at 19% for the fifth month in a row, incoming Brisbanites rose to 24% in August and maintained that figure of 24% in September. The biggest reason for this? The cost of property. Brisbane property prices, although high, are comparatively cheaper than Sydney – 31% cheaper – a staggering differential considering they are two world-class Australian cities.

A resurgence was needed after the pandemic, and a resurgence is what Brisbane has experienced. Additional factors for the property boom are a lack of rentals available, making buying a property a more secure option. With the housing market projected to continue it’s rapid climb, buying a property for renovation, or an investment rental, is also a very attractive option to those looking to get on the ‘investment property’ ladder.

The Outlook

Property prices are predicted to continue to boom into 2024 for Brisbane. Westpac Bank has predicted that Brisbane’s property prices will have skyrocketed by an astonishing 43% in the last five years, higher than second-best Sydney (36%) and third-best Melbourne (33%).

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 Brisbane River has always been a great spot for locals, tourists and business owners. Whether you’re there for a gentle, quiet stroll along the riverside, taking in the sights of Brisbane’s skyline at sunset, or looking for a quality commercial office space or apartment with views, Brisbane’s riverside has lots to offer.

And it’s about to get busier.

Two projects, the Queen’s Wharf Development and the Waterfront Brisbane, are set to turn the Brisbane riverside into an even bigger tourist attraction, whether you’re staying in Brisbane at one of the three new world-class hotels and the Queen’s Wharf Tower, bringing executive-level lavishness to the Brisbane riverfront.

It’s not just accommodation that excites us for the Queen’s Wharf Development. It’s retail giants and large-scale businesses seeking a new opportunity. With over 40,000m2 of retail space earmarked for retail opportunities at Queen’s Wharf, there’s no better time to commit to Brisbane, as the entire development is scheduled to open in April 2024.

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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This change is not only shaping new development, but also investment decisions. This month, we thought we’d look at how sustainability is influencing Brisbane’s property market.

The Rise of Green Buildings

Green buildings are designed and constructed with a strong focus on environmental responsibility and resource efficiency. They are energy-efficient, use sustainable materials, and generally incorporate renewable energy sources.

According to Brisbane City Council, the demand for buildings with certifications such as Green Star and NABERS continues to rise.

Property investors are looking for more sustainability buildings for many reasons, including:

• Environmental responsibility: Sustainable buildings reduce carbon footprints, energy consumption, and waste generation, contributing to a healthier planet.
• Cost savings: Green buildings can have lower operating costs due to energy-efficient systems, which impacts both tenants and property owners.
• Incentives: Australian and State governments offer incentives, such as tax breaks and grants, for sustainable building practices.
• Tenant demand: Tenants are increasingly looking for space that prioritises sustainability.

Impact on Property Investment

Commercial property investors are recognising that green buildings are worth more, so they’re turning to this as a better option. They can benefit from:

• Value Appreciation: Green buildings tend to appreciate more rapidly than conventional properties, making them attractive for long-term investors looking for capital growth.
• Tenants: Sustainable features often lead to higher occupancy rates and lower tenant turnover, which gives property investors a steady rental income.
• Resilience: Sustainable buildings are better equipped to withstand environmental challenges, such as extreme weather events, reducing potential risks for property owners.

Essentially, what we’re noticing is that the demand for green buildings is increasing, and it’s not just an environmental priority, it’s also a sound financial decision for investors.

If you’re looking to invest in a sustainable property, contact the team at McGees and we’ll help find the right property for your needs.

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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Technology is taking over the world, and Brisbane’s commercial property market is no different. Smart building systems and Internet of Things (IoT) integration are changing how commercial properties are managed and operated. Buildings are no longer just brick and mortar, they’re now intelligent ecosystems where technology plays a seamless role to enhance efficiency, comfort, security and sustainability.

In Brisbane, the adoption of smart building systems is on the rise, and it’s changing the way commercial properties are utilised. A great example of this digital transformation is the iconic Brisbane Skytower.

The Skytower, which is a mixed-use building, has redefined the skyline of Brisbane and set a new standard for smart buildings in the city. Equipped with state-of-the-art technology, Brisbane Skytower represents what’s possible in the world of smart commercial properties. Some of the standout features include:

• IoT Sensors to monitor various aspects of the building, including occupancy, temperature, and energy usage.
• Advanced energy management systems that automatically adjust lighting, heating, and cooling based on occupancy and external conditions, reducing energy wastage and lowering operational costs.
• Smart lighting, using sensors to detect natural light levels and adjust artificial lighting accordingly.
• State-of-the-art security systems, including access control and surveillance cameras, which are integrated into a centralised security platform.
• High-speed internet connectivity, supporting the growing demand for data-intensive applications and ensuring seamless communication for tenants and guests.

And there’s mobile app integration, predictive maintenance and waste management systems, and so much more!

Benefits and Challenges of Smart Building Technology

There’s plenty of benefits for smart tech in buildings, including energy efficiency, improved comfort and convenience for tenants, predictive maintenance that reduces downtime, and even data driven decision making – owners can use data to enhance security, space utilisation and maintenance.

But there are also challenges. To start with, retrofitting existing properties with smart technology can be expensive. There’s also a risk that smart buildings, given they operate on technology, can become easier targets for cyberattacks. Privacy of tenants is another issue – and building owners need to consider what data they are collecting.

Regardless, there’s no doubt technology is advancing more each year, and many commercial property owners are taking this on board. What will the future hold for smart buildings? Who knows, but we’re excited to be part of the journey!

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 the last few years, the way we work has seen a lot of change, thanks to COVID restrictions sending people home for months on end. As we move back into the office, many companies are recognising that they no longer need such large work spaces – people are quite capable of working autonomously. This is not only saving those companies money on space, but also providing more flexible options to workers.

Co-working space is one scene that is flourishing. These spaces have emerged as dynamic hubs of productivity, collaboration, and innovation, providing a cost-effective and agile alternative to traditional leased offices.

In Brisbane, co-working is reshaping how some professionals and companies access and utilise office space, which can impact the demand for traditional office space. For example, co-working space:

• Reduces the need for long-term leases, offering flexible membership options, from daily passes to monthly memberships.
• Is a cost-efficient alternative, as businesses only pay for the space they use, with amenities and utilities included.
• Fosters networking and collaboration among those working in the space – and many businesses are seeing the value of being in an environment where they can connect with like-minded professionals and potential partners.
• Allows for growth – businesses can easily scale up their operations within a co-working space without the hassle of relocating or renegotiating leases.

The increased demand for co-working space is impacting developers – with many now repurposing existing commercial properties to accommodate co-working spaces. And it can even give landlords a competitive advantage – many are reevaluating their offerings to compete with the flexibility and amenities offered by co-working providers.

With its flexibility, cost-efficiency, and emphasis on collaboration, co-working is reshaping the demand for traditional office space in Brisbane.

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 forecasted challenges in the market, including increased interest rates and possible recession, are expected to create a complex landscape for investors. However, these hurdles don’t shadow the possibility of opportunities that can be leveraged with strategic planning and astute market understanding.

One thing to note is the projected decline in leased office space. As more companies adopt a hybrid model, allowing employees to split their time between home and office, the demand for traditional office space is expected to remain low. However, this shift is fuelling the demand for flexible spaces, leading to solidification in the sublease market.

The focus on employee experience is another major shift, transforming office spaces from mere workstations to mentorship, team collaboration, and value alignment hubs. The emphasis on Green ratings is also leading to a divergence between premium office spaces and older buildings.

The office market continues to attract overseas investors, and the evolution of workplaces to include more collaborative and co-working spaces points towards a more social and networked future.

As we move forward, the office property market will continue redefining itself, adjusting to new working and living methods.

Need help to navigate these changes? That’s what McGees Property Brisbane is here for! Get in touch with our team today.

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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