There are a lot of empty shops in the CBD, but two factors could be turning the tide

3 months ago 8

Brisbane’s CBD has more than three times the retail vacancies of Sydney’s city centre.

About 18.3 per cent of all CBD sites in Brisbane – almost one in five – are unoccupied, according to new data from commercial real estate services company CBRE.

In the NSW capital, that figure is just 5 per cent. In Melbourne, it’s 6.9 per cent.

“Super strong” office attendance in Brisbane is driving foot traffic in the CBD.

But despite the high number of vacancies in Brisbane, the rate has been consistently ticking down since COVID.

“Particularly when we compare it to other east coast cities, office attendance in Brisbane is super strong,” said CBRE’s head of retail and alternatives research, Kate Bailey.

“That’s really helping to drive lunchtime trade and foot traffic volumes throughout the CBD, which is pushing up tenant demand and rents, and subsequently lowering vacancies.”

Fifty-cent fares have likely helped lure some workers back into the office, the report found.

The report found about 79 per cent of Brisbane workers attended the office most days. Wednesday was the busiest time of the week, with about 86 per cent coming in.

Bailey said those numbers were buoyed by cheap public transport and new infrastructure, including the Kangaroo Point Bridge and Metro.

“There are more people that can get into the CBD easily,” she told this masthead.

“You can drive foot traffic by bringing workers back into the office – buying lunch, going shopping in their lunch break, and going out post-work.”

Food and beverage outlets were found to be increasingly prevalent in Brisbane’s CBD, accounting for more than half of all retail sites.

“We’ve seen a real shift towards a lot of convenience stores opening up as well,” Bailey said.

The nationwide survey comprised 5614 retail outlets, including 1363 in Brisbane’s CBD.

Australia’s national average vacancy rate was 11.1 per cent in the first half of the year, tightening 0.4 percentage points on the previous six months.

While the CBD vacancy rate was inflated by some businesses leaving the Wintergarden complex ahead of its redevelopment, it was not entirely clear why there was such a large discrepancy between the Queensland capital and those of other east coast states.

Vacancies in Brisbane’s CBD were most concentrated in shopping centres, with arcades and strips faring better.

“We’ve sort of seen a bit of a push, particularly for international retailers, to open in Sydney or Melbourne first and then expand their footprint to Brisbane,” Bailey said.

“I don’t think there’s any real shortage of retailers opening in Brisbane.

“With the significant population growth that we’re seeing in south-east Queensland and the demand that will be generated in the lead-up to the Olympics, there’s no reason why it couldn’t get down to the same levels that Sydney and Melbourne are experiencing.”

Vacancies were most concentrated inside shopping centres, with arcade and strip locations faring better.

JLL data published by this masthead on Wednesday showed Queensland had recorded its highest growth in shopping centre turnover since 2019, at 22.9 per cent.

The research said new construction was falling short of demand, with current pipelines projected to meet less than half of that required.