APPD Market Report Article


May 26, 2024

Andrew Quillfeldt, Head of Capital Markets Research, Australia


AUD 1,507


All sub-sector rents are steady

  • Rolling annual retail trade growth to February 2024 was recorded at 2.7%, above the national average of 2.4%.
  • There has been a decline in shopping centre space enquiries in 1Q24. Interestingly, leasing demand from aesthetic clinic operators is strong in suburban locations. 

Chadstone Homemaker Centre’s redevelopment reaches completion

  • No supply additions were recorded in the quarter.
  • Chadstone Homemaker Centre’s redevelopment of its former Harvey Norman tenancy reached completion with the addition of Coles Supermarket, Liquorland and more tenancies.

Most significant year-on-year softening in regional and LFR yields

  • Three neighbourhood, one sub-regional and one freestanding retail asset transacted, totalling AUD 129.9 million.
  • All sub-sector yields decompressed year-on-year except for the median sub-regional yield, which was stable.

Outlook: We are likely near the end of the yield-decompression cycle

  • Project feasibility is likely to remain challenging, resulting in a weak supply pipeline.
  • Discretionary spending is likely to remain subdued as the RBA’s cash rate increases continue flowing through the economy.

Note: Melbourne Retail refers to Melbourne's overall retail market.

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