SA household spending trending upwards

• SA household spending continues to trend upwards over Q2 2026, increasing 5.6% (year-on-year) in May 2026 versus 5.0% in February 2026. The strongest year-on-year spending growth was recorded in the health category (9.6% year-on-year).
• Despite leasing activity remaining relatively slow in the Adelaide market, food and beverage retailers continued to drive demand over the quarter, securing retail space across the Adelaide CBD and neighbourhood areas.

One major completion recorded over the quarter

• One major completion was recorded over the quarter in Adelaide, totalling 10,000 sqm. Over the past 12 months, three retail centres completed, adding 28,000 sqm of retail to stock; above the 10-year annual average of 26,500 sqm.
• There are nine projects under construction totalling 65,400 sqm, with the latest project expected to be completed by Q3 2027. Additionally, there are five projects with plans approved, totalling 32,600 sqm.

Moderate rental growth across all sub-sectors

• Average rents across all sub-sectors increased moderately in Q2 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: Rental growth expected to accelerate in the near term

• Rental growth is forecast to accelerate, underpinned by resilient tenant demand trends. The annual growth rate is expected to average between 2.4% and 2.9% across the regional, sub-regional and neighbourhood sub-sectors over the following five years.
• 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.