This morning and just a few hours after the International Olympic Committee announcement, Brisbanites are celebrating the selection of Brisbane as the host city for the 2032 Summer Olympic and Paralympic Games. As highlighted by recent Colliers’ research, we forecast the Queensland Property Market as the real winner of this announcement.
This blog provides greater insights on what the Olympics opportunity really means for Brisbane retailers and landlords over the next decade considering the historical performance of the sector and current key trends.
Queensland retailers willing to adapt remain resilient despite challenges
The COVID-19 pandemic altered the status quo globally. Without any doubt, it accelerated the online retail penetration in Australia from 6.6% in February 2020 to 9.2% in April 2021 after peaking at 11.0% in August and September 2020 (ABS Online sales, April 2021).
Our trend analysis of retail sales data has revealed that Queensland’s annual retail turnover for the year to May 2021 of A$76.3 billion represented an increase of 12.4% compared to the annual retail sales estimated in May 2020 of A$67.9 billion. Assuming Queensland’s online penetration rate replicates Australia’s penetration rate, Colliers estimates that Queensland’s annual brick-and-mortar retail activity approached A$70 billion in May 2021 following a consistent upward trend over the past year and increasing from A$61.1 billion in May 2020.
In light of these findings, we expect online retail activity will continue to grow at a faster pace than brick-and-mortar retail sales. However, our analysis of annual retail turnover in the sunshine state demonstrates that adaptable retailers have shown resilience during the course of the pandemic being able to grow online and brick-and-mortar revenue by developing multichannel strategies and adapting to current market conditions.
Various café and restaurant operators in Brisbane, hardly affected by the extended lockdown in 2020 and circuit-breaker lockdowns this year, have shown consistent resilience of being able to adapt to the new norm by taking advantage of the liquor license relaxation laws and quickly adjusting to changes of consumer demand trends. For example, Italian fine-dining restaurant, 1889 Enoteca in Woolloongabba, has consistently adapted its food and wine menus to take away during lockdowns. Agnes, wood-fired restaurant located in Fortitude Valley, also adjusted its business service during lockdowns and opened Agnes Street Bakery Pop-Up and Bottle Shop which has been a success and very well-received by the community.
Within this context, the Queensland retail leasing market has been a mixed bag over the past 18 months. Retail centres servicing retailers who have been unable to adapt have been the most affected, while landlords servicing retailers showing the ability to rapidly respond to changing market conditions have been able to maintain revenue streams and therefore investment yields.
The reality is that Brisbane’s strong economic fundamentals are needed to support retail activity across different formats; and the announcement that Brisbane will be the host city of the 2032 Olympic and Paralympic Games strengthens the city’s economic fundamentals over the long term. The main knock-on effects to the Queensland economy following this announcement are that business confidence has been boosted, as well as interstate migration to Brisbane has most likely become more attractive to south siders. This announcement also means that the SEQ long-term infrastructure investment program will be accelerated to support the delivery of the 2032 Olympic Games. All these factors are forecast to boost Queensland’s retail expenditure per capita which has historically followed an upward trend, reaching A$14,109 in December 2020 and holding above the Australia’s retail expenditure per capita of A$13,618.
What’s the future of retail activity in Brisbane following the 2032 Olympics announcement?
Colliers have the view that retail activity in Brisbane have the potential to benefit before, during and after the proposed 2032 Olympic and Paralympic Games. This is because the proposed concentration of sporting venues within Brisbane’s inner region along with the improved transport infrastructure and connectivity will provide the opportunity to modernise the city appeal and better integrate the inner suburbs with the CBD. This creates the perfect conditions for residential urban renewal projects to become financially viable as the enhanced profile of inner-city suburbs and CBD areas will attract an increase in demand for housing.
Within this context, we expect to see property developers becoming increasingly interested in development opportunities particularly in inner-city suburbs and CBD areas in proximity to the Cross River rail stations and the proposed Hamilton Northshore Olympic Village. Residents from these new residential urban renewal projects and the increased pedestrian traffic from the rail stations will need to be serviced by CBD and neighbourhood retail centres creating attractive retail investment opportunities for landlords in the future.
International exposure and visibility resulting from planning and hosting the Olympic Games provides the opportunity to globally showcase the sunshine state and enhance the city’s business investment profile at a global level. Even in anticipation of this announcement, some interstate retailers have fallen in love with Brisbane as they have anticipated that the city is entering the eye of a perfect storm that will create the right economic and social conditions for retail activity to boom. Harris Farm market, a family-owned and operated NSW high-end grocery chain-store, have opened two stores in inner Brisbane in West End and Clayfield. A third SEQ store is in the pipeline and will be located at Capri in Via Roma neighbourhood shopping centre in the Gold Coast. Sydney retailer, Stanton Food, has also expanded into Brisbane highlighting the wonderful growth potential of the city and focusing on providing gourmet and unique dining experiences tailored to suit the taste of local clients.
Experiences in cities hosting Commonwealth and Olympic Games in past years have revealed the need for government and organisers to develop and implement strategies to promote economic and financial benefits for small-business owners in the lead up to the Games. The implementation of social marketing strategies promoting residents participation in activities and supporting local businesses during and after the Games would be extremely beneficial to promote long-term economic growth.
Whilst we are still celebrating this amazing opportunity for our city, the time has come to start planning the delivery of the Games in the way that financial, economic and social legacy outcomes at a city, state and country level are achieved over the long term.