May 2018 – Queensland Retail Centre Insights (sub $20million)

22 May, 2018 / Vanessa Rader and Michael Feltoe

Improvements in key economic indicators across the State of Queensland (QLD) have assisted in driving investment demand in QLD retail assets. Historically low interest rates and the associated cheap cost of debt have continued to ‘fuel the fire’ with average yields experiencing their sixth year of compression from 9.75% in 2012 to 6.77% in 2018. A leading driver of this has been the continuing trend of southern state (NSW and VIC) investors targeting QLD, to take advantage of comparatively higher yields.

With over $28billion of public and private infrastructure coming to Brisbane and multiple large regional projects, interstate investors are continuing to develop higher levels of confidence in the future of QLD and especially Brisbane. The housing price gap between QLD and the southern states has also not gone unnoticed and as such, QLD has experienced the highest level of interstate migration in Australia. Retail trade has experienced some improvements, with food retailing being the stand out performer. Overall, retail market fundamentals are forecast to remain stable throughout 2018.

 

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