SA household spending on upward trend

• SA household spending continues to trend upwards over Q1 2026, increasing 5.0% (year-on-year) in February 2026 versus 4.7% in November 2025. The strongest year-on-year spending growth was recorded in the health category (10.7% year-on-year).
• Despite leasing activity remaining relatively slow in the Adelaide market, service operators and food and beverage retailers continued to drive demand over the quarter, securing retail space across the Adelaide CBD, neighbourhood and LFR sub-sectors.

Two major completions recorded over the quarter

• Two major completions were recorded over the quarter in Adelaide, totalling 18,000 sq.m. Over the past 12-months, three retail centres completed, adding 38,700 sq.m. of retail to stock; above the 10-year annual average of 26,500 sqm.
• There are nine projects under construction totalling 63,900 sq.m., with the latest project expected to be completed by Q4 2027. Additionally, there are five projects with plans approved, totalling 32,600 sq.m.

Marginal rental growth across all sub-sectors

• Average rents across all sub-sectors increased marginally in Q1 2026. High construction costs persist and retailer demand for space remain broadly resilient.
• Yields were unchanged across all sub-sectors over the quarter. On an annual basis, a yield tightening of 13 and 25 basis points was recorded across the regional and neighbourhood sub-sectors, respectively.

Outlook: Investment volumes expected to moderate in the near term

• Rental growth is forecast to accelerate, underpinned by existing tenant demand trends.
• However, given persistent global economic uncertainty and potential further interest rate hikes, investment volumes may moderate in the near term as investors remain selective in terms of potential acquisitions.