Australian Retail Figures Report Q4 2023

Improving Transaction Volumes, Emerging Rent Growth

Key Points:

• Retail sales grew 2.2% y-o-y and 2.0% m-o-m in November, with monthly growth spurred by Black Friday sales. Cafes, restaurants, takeaway and food continued to be the primary drivers of retail sales growth in Sep-Nov 2023, up 4.9% and 3.3% y-o-y, respectively.
• Consumer sentiment declined 1.3% m-o-m to 81 in January 2024, recaching a level of pessimism for January only seen during the recession in the early 1990s. The index has remained below 100 since early 2022.
• Net face rents varied significantly by market this quarter. In general, super prime CBD rents held steady in most markets, with the exception of Melbourne, which continued to decline. Nationally, average rents grew q-o-q across both shopping centre and LFR, however, there was some variance amongst individual markets.
• Yields continued to soften across all asset classes. Further yield expansion is expected in 2024, however at a decreasing rate as investor confidence gradually recovers.
• In Q4 2023, there were 20 retail transactions totalling $1,213 million. Shopping centres continued to dominate transaction activity, comprising 78% share by transaction value.