Retail Market
FY2026 | Quarter 4
Australia’s retail sector continues to demonstrate resilience despite elevated inflation, geopolitical uncertainty and a more cautious consumer backdrop. Household spending increased by 1.3% month-on-month and 5.5% year-on-year in May 2026, supported by population growth, resilient employment and ongoing demand for non-discretionary retail. Limited new supply and high occupancy levels continue to underpin strong leasing fundamentals across the sector.
Leasing conditions strengthened further throughout Q2 2026, with rental growth recorded across all major retail asset classes. Large Format Retail (LFR) remained the strongest performer, with annual rental growth of 6.4%, while sub-regional, neighbourhood and regional shopping centres recorded growth of 3.1%, 2.9% and 2.5%, respectively. Tight vacancy conditions and limited development activity have contributed to ongoing incentive compression and strengthened landlord bargaining power.
Retail investment activity accelerated significantly through late 2025 and into 2026, driven by the return of institutional capital and strong investor demand for defensive retail assets. National transaction volumes reached $3.9 billion across 32 deals in Q2 2026, with regional and neighbourhood shopping centres accounting for approximately $2.6 billion of investment activity. Transaction volumes were 14% higher than the same period last year, while yields remained broadly stable, reflecting continued confidence in the sector’s occupancy levels, rental growth prospects and long-term income resilience. (Australian National Retail Q2 2026 Snapshot, Q2 2026)
Furthermore, convenience retail continues to be viewed as a secure asset class to private investors and has seen continued strong demand from investors nationally. This demand is driven by the smaller price point, national tenant covenants, and medium-long term lease structures.
Notable regional Queensland sales include:
- Winston Glades Shopping Centre (Ipswich) sold in July 2026 for $23.75 million (6.70% yield)
- Petrie Village Shopping Centre (Moreton Bay) sold in June 2026 for $12 million (5.30% yield)
- Clifton Village Shopping Centre (Cairns) sold in June 2026 for $34 million (7.84% yield)
