Real estate firm, Colliers, announced they are currently talking to a number of luxury brands that are not yet in Brisbane who are actively looking to secure sites for 2018.
According to Kym Thrift, QLD retail director leasing for Colliers, total estimated expenditure for the CBD is $3.85 billion per annum for main trade area and is growing.
The real estate firm sees demand coming from well-established local operators and sophisticated restaurants from Sydney and Melbourne looking to take advantage of urban renewal and growth in the state. The hotspots will continue to be Fortitude Valley and Newstead due to the level of development that is happening in the area, with potentially 11,980 new apartments coming online over the next 3 years.
Population growth in the inner city region is at 8.5 per cent per annum, almost five times the growth of the Brisbane average at 1.8 per cent. Retail spending is also growing by 9 per cent annually, with casual dining spend levels at 88 per cent higher than the Brisbane average.
Brisbane has also experienced three per cent tourism growth year on year.
According to Colliers, the majority of the leasing deals done by the company this year were around casual dining and quick service food. But, the company said, the market is responding very well to international fashion brands like H&M and Zara and added in 2017 many more entrants and brands will be announced on the back of continued development surge within the inner city ring.
This rapid growth, more than the state’s average, is creating more demand which is directly impacting the retailers’ performance, data from Colliers shows.
Stewart Gilchrist, national director of Retail Investments, said neighbourhood shopping centres in South East Queensland are in limited supply with existing owners reluctant to sell unless there are alternative projects in which they can invest in.
“In the property cycle terms we have been in the 9 to 11 o’clock period for quite some time,” Gilchrist said.
In excess of 90 per cent of retail centres are being sold to local investors such as wealthy private individuals, syndicator groups, superannuation funds and smaller local institutional investors.
“Yields have tightened approximately 0.5 per cent pa over the past two years,” he said. “Despite many experts stating that the market has topped out, we are continually experiencing record low yields as new centres come onto the market.”
Gilchrist said looking forward, there are very few new shopping centres being developed and there is a huge volume of unsatisfied demand.
“With a combination of a long term, low interest rate cycle, and considerably higher yields than those being achieved overseas, we are likely to continue to experience record sale prices for quite some time.”
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