Multi-stage expansion: Brisbane commercial sector gears up for Olympics-driven boom

Since the Olympics was announced, the South East Queensland economy has grown from $29.4 billion in 2020/21 to $33.4 billion in 2023/24, being one of the strongest short-term growth periods in two decades.

Colliers Queensland chief executive Simon Beirne said that demand would ramp up in waves, starting with infrastructure and construction activity, before expanding into tourism, hospitality, transport, logistics, retail, professional services and accommodation.

“As we saw in other Olympic cities, the largest surge in demand does not occur when infrastructure begins; it occurs later, as operational requirements ramp up and the full scale of the event comes into focus,” he said.

“With roughly half the runway to Brisbane 2032 behind us, the city’s economic engine is already shifting into a higher gear.”

He also said recently adjusted federal tax settings were likely to prompt a period of reassessment across commercial property markets.

He said investors were re-evaluating their after-tax returns, pricing expectations and broader capital allocation decisions in response to the new policies.

“However, the fundamentals underpinning commercial real estate remain strong with tightening vacancies and constrained new supply, which will result in rental growth across key markets supporting long-term investor confidence,” he told SPI.

Office

The report said Olympics-related demand was likely to shift from infrastructure and construction activity to international businesses, media, events and tourism, supporting steady office market growth and improved leasing conditions.

Colliers said many offices have been trading 20–45 per cent below replacement cost due to increasing construction costs, with the market presenting attractive value opportunities.

“This pricing gap enables office space to be acquired at a meaningful discount, providing an advantage for investors seeking to secure high-quality assets,” it said.

“Current conditions present an attractive entry point into the next cycle of capital value growth.”

As tenant demand for modern, premium office spaces increases, investors will have an opportunity for creation through the revitalisation of older stock.

The report said tenants have increasingly been favouring modern, amenity-rich buildings, placing pressure on older, C and D grade assets, which are seeing higher vacancy and softer rents.

“By refurbishing, repositioning, or adaptively reusing older assets, owners can narrow the performance gap with prime stock, re-enter the core leasing market, and capture displaced tenant demand,” it said.

Industrial

In the industrial sector, the report said that construction and new Olympic infrastructure, such as stadiums, athlete villages, and transport upgrades, will be key drivers of change.

It added that logistics and distribution, such as large format warehouses, and specialised storage facilities within a 10–15 km radius, were likely to see the strongest demand.

This demand will gradually surge, initially driven by construction and infrastructure, before intensifying as Games-related logistics, such as equipment, merchandise, food, and event supplies, become more relevant.

The report said phases attract developers and investors looking to capture long-term, high-value opportunities.

Supply in Brisbane’s industrial market has also been tightening, from 5.9 per cent vacancy during the pandemic to 4.3 per cent now, with the key constraint being availability of land.

Retail, hospitality, and accommodation

Infrastructure projects will also deliver opportunities for the retail space ahead of 2032, including the expansion of Queen Street Mall, and the wider Albert Street renewal linked to Cross River Rail.

The report said these developments will establish a larger, more connected pedestrian precinct, supported by a public plaza above the future Albert Street Station.

It said that by focusing on high traffic, well-connected areas and combining them with lifestyle, entertainment, and transport infrastructure, the city’s retail sector will likely turn the Olympics into a catalyst for long-term growth and vibrancy.

Further, demand across retail, hospitality and accommodation will escalate as workforce numbers increase and international visitors begin to flow into the city in greater volumes closer to 2032.

“Hotels, short-term accommodation, and mixed-use precincts are likely to play a key role in absorbing athletes, officials, media and support teams,” the report said.

“Transport upgrades and improved connectivity are expected to increase foot traffic and support long-term retail and hospitality growth.”

Ultimately, Beirne said Brisbane’s economic engine was already shifting into gear, but the commercial property market was not yet seeing peak Olympic demand, instead being at the start of a multi-stage expansion.

“The commercial property market needs to start preparing now. The infrastructure program may have sparked the cycle, but the real expansion is still ahead,” Beirne concluded.

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