Non-discretionary spending increased annually by 5%, which was double the discretionary spending of 2.7%

• The Consumer Price Index (CPI) rose 3.7%, down from 3.8% in the 12 months to January 2026. The RBA has lifted the interest rate by 25 bps twice this year driven by stubborn inflation and supply constraints. This brings the cash rate target to 4.1 percent, with further increases likely.
• The Westpac Melbourne Institute Consumer Sentiment Index fell 12.5% to 80.1 in April 2026 the largest monthly decline since the COVID-19 pandemic and the lowest reading since November 2023. Consumers are feeling the squeeze on their pockets however Victorian household spending managed to rise 0.4% month-on-month in February 2026, above the national average of 0.3% month-on-month.

Six projects were completed in Q1 2026, up from the previous year

• Six projects were completed in the quarter, three of which were neighbourhood centre new builds adding 19,455 sq.m. of retail and the other three were refurbishments.
• One of these refurbishments was the AUD 72.0 million redevelopment at Westfield Southland regional centre, which delivered a new family dining and entertainment precinct.

Eleven retail sales were transacted in Melbourne

• The largest sale, excluding inter-fund transactions, was Summerhill Shopping Centre as part of the LaSalle portfolio.
• The entire portfolio was sold to Charter Hall for AUD 360 million, with Summerhill accounting for AUD 91.0 million.

Outlook: Markets are hesitant as the 2026 landscape shifts amid geopolitical and economic uncertainty

• Yields are forecast to hold steady through 2026, following a compression cycle that began in late 2024.
• Fifteen projects are scheduled for completion in 2026 with Neighbourhood centres dominating the pipeline.