CBRE research shows Brisbane CBD retail vacancy rose to 19.5 per cent in the first half of 2023

Retail vacancies in Brisbane’s CBD continue to spiral, with new research revealing the shocking state of shop vacancies there. But there is still some cause for optimism as the heart of the city seeks to redefine itself.

Chloe MacDonald outside what was then the Myer Centre in the Queen Street Mall.

Retail vacancies in the Brisbane CBD continue to increase as the business heart of the city bears the brunt of the lingering impact of the Covid pandemic with office workers staying at home, changing consumer habits and cost of living pressures.

While there is evidence that the recovery is gaining momentum with workers returning to the office and more international tourists, the CBD will have to continue to redefine itself.

According to CBRE’s latest Brisbane retail vacancy report, which will be released in full next week, retail vacancy in the city rose to 19.5 per cent in the first half of 2023, up from 18.5 per cent in the previous six months.

Retail centre vacancy in the CBD increased significantly in the half reaching 25 per cent. The Myer Centre – now named Uptown – particularly struggled with multiple retailers leaving off the back of the announcement that the department store was closing. It shut its door on Monday, giving up thousands of square metres of space.

Armour Customer Jewellery owner Thomas Pfeffer said from his shop on Level 3 in the Queen Adelaide Building that it was hard to ignore the large amount of empty retail space across the CBD.

“There’s a strip in Adelaide St from the corner of Albert Street all the way up to the Brisbane Arcade where every single shop is vacant. I don’t think the city is necessarily in trouble but it’s definitely going through a regrouping period,” he said.

“Everyone obviously has gotten used to not having to come into the office every day of the week but that’s not necessarily a bad thing.

“But I think what it means is all these big businesses are taking smaller (lease) areas. So over time, that’s going to equate to a lot more businesses here. I think you’re actually going to end up with a far more dynamic sort of hub but it’s going to take time.”

Thomas Pfeffer, owner of Armour Custom Jewellery in the Queen Adelaide Building.

QUT Business School professor of marketing and consumer behaviour Gary Mortimer said there has been a long-term shift in consumer behaviour and they were no longer going into the CBD just to shop.

“There’s no reason to go into the CBD to shop because of the problems with parking and the fact is that all of those brands, departments stores, food and entertainment and movie theatres are in the mega shopping centres in the suburbs at Chermside, Carindale and Indooroopilly,” he said.

That means the city has to redefine itself.

Griffith University has a major 15,000sq m requirement for a CBD campus which if realised it would bring thousands of students into the CBD. There will be more people living in the city with the soon-be-completed luxury apartment tower at 443 Queen St and developers like Meriton’s Harry Triguboff planning mega apartment projects.

Every shop between Albert St and the Brisbane Arcade is vacant.

Dr Mortimer said he doubted the CBD will be increasing its retail offering but it will be different.

“The CBD will change and potentially have university campuses, international colleges and an appetite for city apartments, hotels and of course offices,” he said.

Retail may be flagging but it can still hit the right notes

CBRE associate director of retail leasing in Brisbane Tanaka Jabangwe said there was no denying that there were more empty shops but they were still fielding strong demand from national and international retailers for super prime stores on the city’s retail strips.

“The demand for flagship outlets is being fuelled by workers returning to the CBD and a resumption of international tourism, as retailers tap into the continued demand for experience-based, physical stores,” he said.

“One example involves Louis Vuitton relocating to a new mall location in the NAB Heritage Building, which is double the size of its previous store in QueensPlaza.”

While in the past the retail focus was firmly fixed on the Queen Street Mall, the opening of the Howard Smith Wharves, Queen’s Wharf in 2024 and Brisbane Waterfront on the old Eagle Street Pier site forecast for 2027-28 will continue the trend of broadening the CBD.

However, the greatest change for the CBD in the past few years was the Covid pandemic, which left countless offices empty.

Lockdowns may be a thing of the past but the Covid-induced hybrid office trend has resulted in more people working from home, especially on Monday and Friday.

Property Council of Australia's QLD executive director Jen Williams.

The Property Council stopped doing its occupancy surveys at the start of the year but its

latest office vacancy survey for the CBD found cause for optimism.

Over the six months to July, the office vacancy rate fell from 12.9 per cent to 11.6 per cent because of continual strong demand.

The rate will tighten further until 360 Queen St and 205 North Quay are expected to be complete by 2025 and the first tower at Waterfront Brisbane two years later.

Property Council Queensland executive director Jen Williams said with nearly 30,000sq m of net absorption over the six months, Brisbane’s office market had defied the downturns being experienced in other capital cities.

“Brisbane’s CBD has experienced a third consecutive vacancy decrease according to our data,” she said. “This really underpins the positive sentiment from businesses who are buoyant about Brisbane’s future and want to buy into the momentum our state is experiencing.”