Sydney Retail Figures Q1 2026

Key Points:

• NSW household spending increased 3.3% y-o-y in February, reaching a total of c. $24.9b.
• Q1 2026 development activity was subdued, with only c. 9,000 sqm delivered, reinforcing the structurally constrained supply environment supporting rental outperformance.
• Sydney CBD retail vacancy declined a further 78 bp in H2 2025 to 4.3%, marking the fifth consecutive half year of tightening since H1 2023, driven by sustained leasing activity across core precincts and improved occupancy in arcade, strip and centre retail formats.
• During the quarter, CBD super prime rents recorded the strongest uplift at 3.0%, followed by regional shopping centres at 1.9%, while sub regional and neighbourhood centres increased by 1.0% and LFR assets rose by 2.0%
• Yields were unchanged across all retail asset classes in Q1 2026. On an annual basis, regional and sub regional shopping centres recorded the most pronounced compression of 16 bp and 20 bp respectively, while LFR and neighbourhood shopping centres experienced more modest tightening of 4 bp and 6 bp respectively.