APPD Market Report Article


May 26, 2024

Andrew Quillfeldt, Head of Capital Markets Research, Australia


AUD 1,716


Annual rent growth is strongest in the neighbourhood sub-sector

  • Rolling annual retail trade growth to February 2024 reached 1.7%, below the national average of 2.4%.
  • Enquiry levels were higher post-December holidays. Operators remained risk-averse, hence the conversion rate to leases was softer, leading to stable leasing volumes.

New retail supply of 16,700 sqm comes online

  • Oran Park Podium’s extension project reached completion, introducing 16,700 sqm of new retail space to the market. Warrawong Plaza’s and Plumpton Marketplace’s refurbishment projects have been completed.  
  • Quarterly completions were 45% below the ten-year quarterly average of 24,100 sqm.

Yield decompression in the CBD and neighbourhood sub-sectors

  • Yields softened in the CBD and neighbourhood sub-sectors by 13 bps.
  • Six assets transacted, totalling AUD 243.8 million.

Outlook: Low supply to increase existing asset productivity

  • The supply pipeline is likely to remain soft as labour shortages and debt costs impact project feasibility.
  • Discretionary spending likely to remain subdued as the RBA’s cash rate increases continue flowing through the economy.

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

Talk to us 
about real estate markets.