Retail Market
FY2027 | Quarter 1
Australia’s retail sector continues to demonstrate resilient fundamentals despite persistent inflation, elevated operating costs and ongoing global economic uncertainty. This Retail Market Summary reflects how household spending was unchanged month-on-month in August 2026, with annual growth of 6.8%, as consumers increasingly prioritised essential purchases over discretionary spending. Population growth, resilient employment and sustained demand for non-discretionary retail continue to support the sector. Limited new supply and high occupancy levels remain key drivers of strong leasing fundamentals across retail markets.
Leasing conditions remained favourable throughout Q3 2026, with rental growth recorded across all major retail asset classes. Large Format Retail (LFR) remained the strongest performer, with average gross face rents increasing 7.8% year-on-year. Meanwhile, neighbourhood, sub-regional and regional shopping centres recorded annual rental growth of 3.1%, 3.5% and 2.9%, respectively. Tight vacancy conditions and limited supply continue to support rental growth, while incentives remained broadly stable with marginal tightening. As a result, landlord bargaining power has remained favourable despite increasing pressure on retailer margins.
Retail investment activity remained strong throughout Q3 2026, supported by continued investor demand for defensive retail assets and resilient income profiles. National transaction volumes reached $5.6 billion in Q3 2026, bringing year-to-date volumes to $11.9 billion. Regional and neighbourhood shopping centres continued to attract the majority of capital, accounting for approximately 65% of capital deployed year-to-date. Investment activity remains well above historical averages, with 2026 year-to-date volumes already 48% above the 10-year average. Meanwhile, yields remained broadly stable, reflecting continued confidence in the sector’s occupancy levels, rental growth prospects and long-term income resilience. (Colliers Australian National Retail Q3 Snapshot, Q3 2026).
Notable regional Queensland sales include:
- Pialba Place Shopping Centre (Pialba) sold in August 2026 for $39.90 million (6.84% yield)
- 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)
