APPD Market Report Article


February 22, 2024

Andrew Quillfeldt, Head of Capital Markets Research, Australia


AUD 1,715


Rents remain stable across all sub-sectors

  • While annual retail trade growth continues to trend downwards in New South Wales (3.7% y-o-y), Black Friday has driven positive monthly retail trade growth for November 2023 (1.6% m-o-m, up from -0.7% in October 2023).
  • Leasing activity remains weak across most categories and sub-sectors, but enquiries for CBD retail spaces have increased. 

Supply concentrated in the neighbourhood sub-sector

  • Two new neighbourhood centres reached completion, adding 21,800 sqm of new retail space in the quarter.
  • Annual supply additions in 2023 totalled only 47,900 sqm, 45% less than the ten-year annual average of 86,600 sqm. 

Regional and sub-regional yields remain stable

  • Neighbourhood, LFR and CBD mid-point yields softened to between 12 and 38 bps over the quarter.
  • Transaction volumes totalled AUD 1,144.5 million in 2023, a 45% decrease from 2022.

Outlook: Households to keep pulling back on discretionary spending

  • As cost of living remains elevated, households are likely to continue pulling back on discretionary spending in the near term.
  • Supply additions in 2024 are expected to total 133,400 sqm, broadly in line with the ten-year average. However, construction costs remain a headwind to the supply pipeline.

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

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