Signs of life in Queensland retail market
A large section of Queensland’s regional retail market looks set to rebound, with a report by Herron Todd White indicating that a number of the state’s larger regional cities are starting to recover from the market downturn.
According to the review of the commercial retail market, Rockhampton, Hervey Bay, Toowoomba and the Sunshine Coast are all lifting off the bottom of the market cycle, as are both the far north and mid north coast of New South Wales.
This follows Brisbane and the Gold Coast, which are already responding to rising market conditions.
But the retail markets in Mackay and Gladstone are still thought to be in decline, while Cairns, Townsville and Bundaberg remain at the bottom of the cycle.
The Toowoomba retail sector appears to be extremely active, with a number of new developments proposed or underway
The market review comes as Queensland is expected to notch up sizeable retail property sales this year, with the state recording $1.1 billion of sales in the first six months of the year.
JLL’s Queensland director of retail investments Jacob Swan says: “Retail investment conditions in Queensland are robust. Already in the first half of this year, $1.1 billion of sales have been recorded, which is more than three times the volume at the half-year mark in 2014″.
Toowoomba in particular is experiencing a boom in retail construction projects, including the $500 million redevelopment of the QIC-owned Grand Central and Garden City shopping centres in the CBD and the $70 million redevelopment and expansion of Wilsonton Shopping Centre.
“The Toowoomba retail sector appears to be extremely active, with a number of new developments proposed or underway,” the report says.
Herron Todd White director Ian Douglas says a number of large infrastructure projects in the region are generating positive sentiment towards the Toowoomba retail market, as is the recent influx of interstate investors into the new home market.
Retail investment conditions in Queensland are robust
Douglas says there is a developing trend for interstate investor interest in Toowoomba retail, which is historically closely held by local private investors.
Hervey Bay is beginning to see signs of activity after very little retail development in the last 12 months, aside from the completion of the Stockland Hervey Bay expansion.
The neighbouring Bay Central Shopping Centre was sold to a Melbourne-based private investor for $17.5 million in August, while a new shopping centre is proposed directly adjoining the existing Urangan Central on a 3.3 hectare parcel of vacant land.
Herron Todd White’s report says Rockhampton is also starting to see a shift despite a recent lack of major retail developments, noting the $6.6 million expansion at Stockland Rockhampton as one indicator, with completion expected in early 2016.
The report highlights the shift in East Street Mall, with plans for a council rejuvenation of the area, while first floor accommodation is also slowly being reverted from office and storage space to residential unit accommodation.
“This will provide more opportunities in the long term for a variety of ground floor tenants. In the immediate term however, vacancies are likely to remain high in this precinct,” the report says.