QLD MARKET OVERVIEW
QUEENSLAND
Robert Dunne - Director Commercial Sales - Savills Reflecting on 2023, how would you describe the year in terms of activity, buyer and vendor sentiment and what were any underlying trends that stood out? 2023 commenced with the twin challenges of
for more discreet transactions. Off-market transactions offered a unique avenue for both buyers and sellers to explore opportunities that might not have been readily available in the public domain. At this time of year on market campaigns are less likely over the Christmas period, so rather than wait until the new year we usually see a flurry of private treaty transactions in the lead up to Christmas. Which asset classes best withstood the market headwinds in 2023 and is this likely to continue into 2024? In the face of market headwinds this year, certain asset classes demonstrated notable resilience. Industrial continues to be the rock star property sector for the next decade. The accelerated growth of e-commerce and the need for efficient supply chains bolstered demand for this asset class. Warehousing and distribution facilities, in particular, saw sustained interest from buyers. Improved assets and income producing investments are popular as they avoid the rising construction costs. On the flip side, while commercial real estate faced challenges due to remote work trends, there is potential for recovery as businesses adapt to hybrid work models. Counter cyclically Dexus are currently under construction with the $2.4M Waterfront Brisbane commercial development on the Brisbane River at 45 Eagle St. The 50 story North Tower will provide 75,000sqm of office accommodation and will be the tallest Office Building in Brisbane. They then have plans for a 42 level 60,000sqm South Tower, while over at 360 Queen St CharterHall are building a 36 level 50,000 sqm of office accommodation. In a commercial market with declining vacancy rates and incentives the completion of construction of these two projects could sit very nicely in the property cycle. We expect demand for income producing property that allows a buyer the ability to ride into the next property cycle will continue into 2024. Can you tell us about some of the biggest transactions in your state in 2023? The stand out development transaction was Bob Ell’s acquisition of the 161HA Coomera Woods for $177M from the Japanese. Kokoda’s $1.5B planned project on the Marine Services Brisbane Riverfront site at
escalating interest rates and increasing construction costs. The rising interest rates had their desired affect of dampening consumer spending. The constrained number of construction companies continues to challenge development feasibilities. Buyer interest has remained consistently high throughout the year however the number of offers and the attractiveness of the underbidders was trending down earlier in the year. A more buoyant sentiment was evident across different segments of the market, particularly industrial, residential, and mixed-use opportunities. Vendors earlier in the year were more willing to test market interest. The vendors currently in the market are committed to transacting. One underlying trend that stood out was the increased focus on sustainable and eco-friendly developments. Buyers and investors demonstrated a growing preference for properties that incorporate environmentally-conscious features and technologies. Additionally, there was a notable uptick in mixed-use developments, reflecting a desire for more integrated and multifaceted urban spaces. We are currently the busiest we have been all year. People currently active in the market are more decisive. There are decisions being made now that weren’t being made 3 to 6 months ago. The best quality property continues to transact at record prices. Equity buyers that aren’t requiring debt funding are seeing good value and buying now to avoid the possibility of being made to pay more later. On-market transaction volumes seemed to be comparatively lower, but what did you observe in the off-market space in 2023? In the off-market space, there was a notable uptick in activity over the past year. Despite on-market transaction volumes experiencing a relative dip, the off-market sector saw increased traction. This trend can be attributed to several factors, including a desire for privacy among sellers, a preference for exclusive and tailored deals, and a need
ROBERT DUNNE
88 – November / December 2023
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