This post is co-authored by my friend Dr Parisa Mahyari, who is a Brisbane-based expert on luxury branding and a property market analyst.
For some time now, Edward St has been associated with luxury brands such as Hugo Boss and Ralph Lauren, and it is becoming known as the “Paris end” of Brisbane CBD. Over the last few years, other brands such as Cartier and Montblanc have boosted the street’s credentials as a luxury shopping destination. In fact, location can be an important part of the success of retail businesses, especially for luxury brands that are targeted at a particular market. The availability of a range of luxury brands in a central location makes the Edward St precinct highly attractive to luxury shoppers, both from Australia and overseas.
That said, Edward St still has some way to go as a luxury shopping destination. There are many luxury stores such as Prada that are not present on Edward St yet, but are in other precincts in Sydney’s Pitt St, Melbourne’s Collins St, and Perth’s King St, for example. And there is the potential for further development to enhance Edward St’s status as a luxury precinct.
Hence it is welcome news that Brisbane City Council has commenced its $11 million upgrade of Edward St to create a world class luxury goods precinct (see image below and the Council website). The wider footpaths, granite paving and street trees will help create a boulevard atmosphere similar to that in European capitals such as Paris and Vienna. And the public art will add to the cosmopolitan atmosphere and attract well-heeled locals and visitors. The planned improvement in the Edward St streetscape appears to be consistent with the vision in the Brisbane Destination Tourism Plan to make Brisbane “Friendly, safe, engaging and accessible.” Additionally, the Council may wish to consider a re-branding exercise for Edward St to cement its status as a luxury goods precinct, similar to how London’s Lower Regent Street was re-labelled Regent Street St James’s (see Capital investment: the evolution of luxury London).
The barriers are in place for the exciting new $11 million Edward St upgrade
The redevelopment has the potential to boost commercial opportunities, not only in luxury goods but also in hospitality, as the widening of Edward St should promote greater al fresco dining. Evidence from overseas, particularly from London developments, suggests food is an important part of the offering of luxury precincts. Primarily, the attraction of a luxury goods precinct is convenience. In one area, people have access to luxury shopping, luxury dining and luxury hotels.
The Edward St redevelopment is consistent with other new investments in Brisbane in luxury hotels and fine dining restaurants and high-end bars, such as OTTO at 480 Queen St, so it can be considered as building on what Brisbane already has.
Due to Brisbane’s superior weather and proximity to the Gold and Sunshine Coasts and the Reef, Brisbane can potentially leapfrog other East Coast cities with luxury precincts such as Sydney and Melbourne in attracting overseas visitors. Current offerings on Edward St have been especially successful with Chinese tourists, and, with the Chinese outbound tourism market growing from around 120 million per annum globally to 200-250 million in ten years’ time, there is obviously huge potential to attract more Chinese tourism (see this Goldman Sachs report). Additionally Brisbane can attract increasingly affluent travelers from across South-East Asia, including from Singapore, Malaysia and Indonesia. Australia offers a superior environment to many regional competitors, particularly Macau, which has seen a drop off in Chinese tourists and spending. However, the Chinese government is now taxing luxury goods purchased abroad, and this will restrain the growth in visitor numbers and spending to an extent (see this Business Insider article).
By helping Brisbane to attract more tourists, the further development of the Edward St luxury goods precinct would align with the current Brisbane City Council’s goals to position Brisbane as one of the most popular tourist destinations internationally and to make it Australia’s “new world city”. It will add to the contributions that will come from major upcoming projects including the $3 billion Queen’s Wharf Redevelopment, the Brisbane Airport New Parallel Runway Project as well as the Brisbane Quarter luxury mixed-use development on the site of the old Law Courts (see Queensland News).
The Council should recover part of the cost of the Edward St upgrade through higher rates revenue, as the further development of the luxury goods precinct will likely result in higher rental incomes and property values. There will be benefits to other levels of government through higher tax revenues. While there is the loss of one lane of traffic on Edward St, the Council appears confident in traffic modelling suggesting this will not significantly add to congestion.
Overall, this appears to be a worthwhile investment given the large potential benefits flowing from additional economic activity and recreational benefits. It may very well attract further investment, as it makes Brisbane a more desirable location to live for high net worth individuals. Given the upcoming 2018 Gold Coast Commonwealth Games, it is a particularly well-timed investment, as there is the potential to attract visitors attending the Games to Brisbane for a spot of luxury shopping.
Dr Parisa Mahyari and Gene Tunny