Commentary

Brisbane Olympics offers a golden retail opportunity

Brisbane’s upcoming 2032 Olympics is already drumming up excitement for the massive potential uplift it offers to the property market.

February 14, 2023

Host to the 2032 Summer Olympics and Paralympic Games, South East Queensland (SEQ) expects to receive as many as 15,000 athletes and hundreds of thousands of visitors from 23 July to 5 September. Although the economic benefit gained from the Olympics is difficult to isolate from other broad factors, The city officials believe that the SEQ capital Brisbane, the Sunshine Coast and the Gold Coast are well-positioned to reap economic benefits experienced in Olympic success stories like Barcelona and London.

Figure 1: Investment Volumes from Overseas Buyers

Source: JLL Research, 4Q22

The economic advantages that a host country could receive can be split into long-term and short-term. In the future, the Olympics can potentially boost SEQ’s appeal as an investment hotspot. Since 2009, only 12% of total retail investment activity in SEQ has been from overseas investors. In contrast, overseas investors make up 17% and 18% of Sydney and Melbourne’s overall retail investment activity, respectively. When taken into conjunction with SEQ contributing 19% to Australia’s GDP and being home to 20% (ABS 2021) of its population, JLL believes that SEQ is set to benefit from more offshore investment into retail. The increased publicity with associated tourism benefits, alongside the expedited infrastructure upgrades the city is implementing, could attract overseas investment currently concentrated in Melbourne and Sydney.

Figure 2: Breakdown of Buyer Origin 2009-2023 (Melbourne)

Source: JLL Research, 4Q22

Figure 3: Breakdown of Buyer Origin 2009-2023 (Sydney)

Source: JLL Research, 4Q22

Figure 4: Breakdown of Buyer Origin 2009-2022 (Queensland)

Source: JLL Research, 4Q22

However, hosting the Olympic Games or a sporting event is not a one-way ticket to a retail bonanza, especially in the short term. After Sydney’s 2000 Olympic Games, it was estimated that the 650,000 visitors were responsible for AUD 170 million of additional sales in Q320. Despite the retail sales increase, ABS reports that overall retail sales turnover fell by 3.3% that quarter as commercial activity slowed because businesses operated with skeletal staff.

As a more recent example, JLL recorded no significant positive impact on Queensland’s retail sector by the 2018 Gold Coast Commonwealth Games. At that time, vacancies increased, and retail turnover growth remained below the national average despite shops in Brisbane and Gold Coast staying open 24 hours. Anecdotal reports from local small retailers claimed that the government over-emphasised potential road traffic congestion, which had a negative effect on retail turnover.

Admittedly, SEQ might be better positioned to realise short-term gains in 2032 than these previous Australian examples. As the 2032 Brisbane Olympics is actually taking place across Brisbane, the Gold Coast and the Sunshine Coast, the risk of congestion is minimised, and the possibility of potential benefits has spreads across a wider area.

Nevertheless, the major beneficiaries of the games appear to be the Brisbane CBD due to the new Queens Wharf integrated casino precinct and the Woolloongabba precinct as its stadium. The Gabba will serve as the Olympics’ main arena. Not to mention, new retail is already coming online within the QIC’s above-rail development beside The Gabba.

Even during the Games, it is likely that this new stock will cater to the tourists and take some of the benefits away from existing local retail infrastructure. Economically, the long-term benefits of the Olympics outweigh the immediate impact of the Games. However, the short-term gains and effect on existing local retailers also play a part.

Only time will tell whether the 2032 Olympics will live up to expectations for the retail sector, both long-term and short-term. However, JLL sees the upcoming Olympics as a golden opportunity for SEQ’s development. 

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