The commercial property market in Queensland is experiencing a significant upswing as sentiment rebounds across various sectors. According to the latest NAB Quarterly Australian Commercial Property Survey for the first quarter of 2024, commercial property sentiment has not only returned to positive territory but has also surpassed average levels. Confidence regarding the upcoming 1-2 years has notably increased, with most sectors showing improvements.

The survey highlights a general improvement in conditions, with CBD hotels and retail sectors witnessing the most significant enhancements. Industrial properties have also seen a positive trend, supported by low vacancies and robust rent growth. While the office property sector has shown improvement, it remains relatively weak, especially when compared across different states. Queensland and Western Australia have exhibited stronger office conditions, with Queensland developers reporting balanced supply conditions for office spaces for the first time in five years. In contrast, sentiment in Victoria has continued to decline.

Commercial property index, a key metric in the survey, has risen to above-average levels, with notable gains in CBD hotels and retail sectors. Confidence levels have also improved, indicating positive short and long-term outlooks across most sectors. State-wise, sentiment and confidence have increased in all states except South Australia/Northern Territory, where local office markets have deteriorated. Queensland has shown the most significant rise in sentiment, while Victoria lags behind with negative sentiment.

Expectations for capital growth in the next 12 months and beyond remain robust in industrial property markets, with Queensland leading the growth projections. CBD hotels also anticipate positive growth, whereas retail properties are forecasted to experience a slight decline in the short term. Office capital expectations are comparatively weaker, with Victoria affecting the overall outlook negatively.

Office vacancies have remained steady but high, especially in Victoria, while Queensland and Western Australia have seen a decline. Retail vacancies have increased slightly, and industrial vacancies remain below average. Gross rents have fallen in office and retail sectors but are expected to stabilize and increase in the coming years. Industrial rents continue to rise steadily.

Developers are cautiously optimistic, with most planning to commence new projects in the next 1-6 months, particularly in the industrial sector. Funding conditions have improved, and developers are more positive about the future, although debt funding remains a challenge. Pre-commitment requirements have eased, and developers are showing more optimism for the next 3-6 months.

In conclusion, the Queensland commercial property market is on an upward trajectory, with improving sentiment and confidence across various sectors. While challenges persist, the overall outlook is positive, especially in industrial and CBD hotel segments. The rebound in the commercial property market reflects a promising trend for the Queensland economy.