WA retail turnover growth increases quarter-on-quarter

• WA retail spending recorded growth of 3.2% year-on-year in September 2024, 0.2 ppts higher than the growth recorded in June. Spending in the other retail category, which include recreational goods retailing, recorded the strongest performance (4.5% year-on-year).
• Although enquiry has slowed from the previous quarter, new fashion retailers have opened in the Perth CBD. Hospitality and services retailers continue to expand their offerings, securing retail space, especially in neighbourhood centres.

One neighbourhood centre completes over the quarter

• Only one major development completed over Q3 2024, totalling 3,608 sqm. Over the past 12 months, completions totalled 11,900 sqm; significantly below the 10-year annual average of 74,100 sqm.
• There are currently seven major developments under construction, forecast to add 53,600 sqm by Q1 2026. In addition to projects already under construction, there are 13 projects with plans approved totalling 248,600 sqm.

Strong investment volumes recorded over Q3 2024

• Average rents recorded marginal growth across all sub-sectors during Q3 2024. Despite only marginal increases to gross rents, an upward trend in rental growth has been evident across most sub-sectors over the last two and a half years.
• Investment volumes increased significantly, with five major transactions recorded over Q3 2024, totalling AUD 839.0 million. The largest transaction over the quarter was a half share sale of Lakeside Joondalup, which exchanged for AUD 420.0 million.

Outlook: Rents are forecast to continue increasing in coming quarters

• As WA retail spending levels remain relatively stable and are expected to maintain these levels, rents across all sub-sectors are forecast to increase by an annual average of 1.9% to 2.9% from 2025 to 2029, with strongest growth anticipated in the regional sub-sector.
• Both retail demand and investment fundamentals are expected to improve as interest rate expectations are revised lower over the next 12 months.