Colliers International: More restaurateurs are headed to Brisbane
The real estate services firm released its overview for the year and 2017 forecast.
Retail Leasing
Kym Thrift, Director, Retail Leasing
2016 Overview
In 2016 we have seen a pickup in activity in Brisbane from big restaurateurs, such as Fink Group who opened Otto at 480 Queen Street. General feedback from these sophisticated restaurant groups is their confidence about Brisbane’s growth and changing culture. They are changing their mindsets about our demographics due to the planned development and strong tourism numbers.
Majority of the leasing deals done by Colliers this year were around casual dining and quick service food. Food sector is very much on the increase and there is very little activity from fast fashion groups. However the market is responding very well to international fashion brands such as H&M and Zara.
2017 Forecast
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. We are currently talking to a number of luxury brands that are not yet in Brisbane who are actively looking to secure sites for 2018. Total estimated expenditure for the CBD is $3.85 billion per annum for main trade area and it is growing. Brisbane has also experienced 3 per cent tourism growth year on year.
We see demand coming from well-established local operators and sophisticated restaurants from Sydney and Melbourne looking to take advantage of our urban renewal and growth. 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.
The population growth in this 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. Ideal retail leasing opportunities in these locations are TC Beirne building refurbishment and Gasworks Stage 3, which is currently under construction.
Retail Investments
Stewart Gilchrist, National Director of Retail Investments
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.
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. They are all simply chasing high yields with security.
Yields have tightened approximately 0.5% pa over the past 2 years. Despite many experts stating that the market has topped out, we are continually experiencing record low yields as new centres come onto the market.
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.
