Vigorous interstate investor activity, low-interest rates, and favourable economic tailwinds will drive demand for commercial real estate in Brisbane in 2022, while the Olympics will prove a factor for the next decade.
Trent Bruce, Director of Raine & Horne Commercial Brisbane North, said, “This year, we are highly optimistic that Australia’s business community will flourish as the economy regains momentum. Businesses will require additional commercial space to reach their full potential, and this will support sales and leasing demand in Brisbane.”
Yields in commercial markets in Brisbane’s north have been achieving between 4.5% to 6% for all three categories of property: industrial, retail and office.
According to Trent, “There is a substantial shift for tenants to move to owner-occupier status due to the availability of cheap loans. This has seen the balance of affordability move to owner-occupation, with leasing generally being more expensive.
“Also, returns on leased commercial property assets still outweigh bank returns, which is driving investor sentiment.
“As a consequence of owner-occupier and investor demand, our auction clearance rates are approaching 90%, demonstrating the strength in the market, and many investors active in the market are from Sydney and Melbourne. We expect these trends to continue well into 2022.”
Longer-term, Trent anticipates that the announcement that Brisbane will host the Olympics in 2032 will deliver broad benefits to the local commercial property market over the next 11 years. “There is no doubt that commercial precincts will benefit from the Olympics,” he said.
“KPMG estimates 91,000 full-time jobs will be generated in the leadup to the Games, and the Qld Government 2032 Taskforce forecast there will be tens of thousands of additional jobs generated from further economic activity before and after the games.
“Construction of venues, residential dwellings to house athletes, infrastructure improvements and an expected increase in private sector spending will have a significant impact on demand for commercial space in the years leading up to the games.”