Leasing demand improved at first but slowed by quarter-end

• Leasing enquiries increased slightly over the quarter, with overall demand remaining stable and positive.
• In February 2026, household spending in Queensland grew by 0.5% month-on-month and 5.7% year-on-year, outperforming the national averages of 0.4% and 4.8%, respectively. Queensland’s household sector continues to show notable resilience despite broader macroeconomic uncertainty and inflationary pressures.

One completion recorded over the quarter

• During the quarter, one completion was recorded in the LFR sub-sector, adding 7,000 sq.m. to the market.
• There are nine projects currently under construction, expected to deliver a total of 65,500 sq.m. by 2028.

Investment volumes slowed relative to the previous quarter

• Yields remained stable across all retail sub-sectors for the quarter.
• Transaction volumes reached AUD 673.1 million, driven largely by several portfolio sales in the sub-regional and neighbourhood categories.

Outlook: Fewer projects to come out of the ground

• Supply is expected to remain constrained due to rising construction costs and intensifying competition for labour across the region, which will likely continue to limit retail supply growth. Rental growth is forecast to persist over the coming quarters, underpinned by strong market fundamentals.
• Yield compression is no longer anticipated in any sub-sector during 2026 due to ongoing macro uncertainty, with the next cycle now delayed until 2027. Investor interest is expected to remain steady as capital continues to favour the income generation profile of retail assets.