Australia's CBD Retail Vacancy Rises to 10.8%

Australia’s CBD retail vacancy rate has edged up by just 40 bp to 10.8% in H1 2026, demonstrating market resilience and the strength of occupier demand across the country.

CBRE’s Australian CBD Retail Vacancy H1 report notes that while vacancy increased slightly, it remains low by historical standards and well below the peaks recorded since CBRE Research commenced the survey in 2021.

Looking at the capital cities surveyed, Sydney has the lowest vacancy at 5.3% followed by Melbourne at 8.1%. 

Adelaide had the strongest improvement, falling 130 bp to 10.4%, Brisbane's vacancy rate saw a slight reduction of 80 bp to 16.7% and Perth also saw a reduction of 10 bp to 18.5%.

CBRE Senior Research Analyst Katya Ezhova notes the increase in the national vacancy was largely attributable to Melbourne, where vacancy increased by 160 bp, following the opening of two new retail centres that introduced additional vacant floorspace into the survey. This suggests the increase was primarily supply-driven rather than reflective of weakening leasing demand.

“The national CBD retail vacancy rate remains relatively low and is a reflection of the resilience of retail markets across Australia, supported by ongoing return-to-office trends, a resurgence in tourism, major events and infrastructure investment, which continue to reinvigorate city-centre foot traffic and retail spending,” Ms Ezhova said.

The report notes consumer spending has proven more resilient than expected despite continued pressure on household finances, supporting performance across Australia's retail sector. 

Limited new retail development in CBDs helped sustain tenant demand, with CBD retail accounting for just 4.2% of total retail supply over the past decade. 

CBRE's Director, Retail Tenant Representation for Pacific Sam Embling said, “Continued expansion from luxury and premium retailers is supporting demand for retail space in CBDs, particularly in Melbourne and Sydney. While at the same time, we're seeing the establishment of more experience-led retail formats, including food and beverage, entertainment and wellness offerings contribute to placemaking initiatives and reinforcing the appeal of CBD retail destinations.”

CBRE's survey covered 5,669 retail outlets across Australia's five major capital city CBDs. Given Melbourne's significant representation within the national dataset, changes in its vacancy rate have an outsized influence on the weighted national result, reinforcing its role as a key driver of broader CBD retail market trends across the country.