APPD Market Report Article

Adelaide

November 28, 2022

Andrew Quillfeldt, Senior Director - Research, Australia

0.4%

AUD 1,242

Rents
Stable

Marginal rental growth in 3Q22

  • Retail spending growth in South Australia (SA) has increased by 4% y-o-y, the highest y-o-y growth rate recorded since November 2021.
  • New retail completions of 4,400 sqm was added to stock over the quarter.

One building completes over the quarter

  • There is currently about 31,800 sqm of retail projects under construction.
  • Vacancy rates in Adelaide’s regional, sub-regional and CBD sub-sectors all decreased in 1H22.

Yields are broadly stable

  • Average rents were either stable or increased slightly across all sub-sectors in 3Q22.
  • Investment activity decreased significantly compared to 2Q22. One major sale transaction that was recorded over the quarter was the AUD 5.2 million purchase of 370 Kensington Road, Erindale, in Adelaide’s eastern suburbs.

Outlook: Investment demand likely impacted by macroeconomic uncertainty

  • Consumer spending is expected to moderate over the short term as a result of multiple increases in the official cash rate coupled with inflationary pressures. This may result in a slowing of retailer expansion activity over the short term.
  • Retail rental growth should remain unchanged as consumer sentiment is predicted to decrease, and retail asset vacancy is predicted to remain tight.

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

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