Elevating emotion: How regional shopping centres are evolving

Across Australia, regional shopping centres are evolving into experience-led destinations through dining, wellness, culture and sport offerings to drive engagement, extend dwell time and strengthen their role as community hubs, new CBRE research shows.

The Regional Shopping Centres Reimagined report provides an outlook of regional shopping centre market dynamics including tenant mix, supply, and vacancy.

The report shows the regional shopping centre supply pipeline halved since 2020 compared to the 10-year average while construction costs have increased around 30% over the past five years, supporting high occupancy and stabilising leasing fundamentals.

Effective rents dipped during 2020-2022 but rebounded from 2022, while re-leasing spreads turned positive in 2023.

CBRE estimates national regional shopping centre vacancy at 2.7% in 2025. Centres built post-2000 show lower vacancy than pre-2000 while metro locations average 1.9% vacancy compared to 3.8% for non-metro locations.

The report notes shifting consumer demand towards convenience and mixed-use precincts had reduced appetite for traditional enclosed formats, with owners now prioritising repositioning over new builds.

In addition, between 2016/17 and 2024/25 regional shopping centres saw shifts in tenant mix with fashion and accessories falling by 3pp while food & beverage and mini majors increased by 2pp.

CBRE’s Head of Retail Property Management and Place Advisory Sheree Griff said the shift towards strong performing mini majors was a notable market trend.

“Driven by their ability to offer daily needs retail and strong sales performance, mini majors are increasingly attractive to landlords in a competitive market,” Ms Griff said.

“Mini-majors, often focusing on convenience and leveraging services like click-and-collect, drive consistent foot traffic and have higher productivity per square metre than department stores and specialties, which make them valuable anchors for shopping centres,” Ms Griff added.

Mini majors remained the largest category at 32% followed by fashion and food & beverage at 30%, highlighting the strength of essential and experience-led retail.

CBRE Head of Retail Research Kate Bailey noted the uplift in food and beverage reflects the growing role of dining and social experiences as a key driver of visitation, particularly as centres reposition to compete with online retail.

“While discretionary retail faces growing competition from e-commerce, food spend continues to grow steadily, underpinned by its experiential, social and in-person nature making it a key driver of in-store growth. For landlords, this means food isn’t just a leasing category, it’s a strategic anchor. Investment in dining precincts delivers stronger visitation, longer dwell time and higher cross-spend across the centre,” Ms Bailey added.

The report further highlights the growing trend of experience-led retail by identifying the ‘Five Es’ elevating regional shopping centres: Eat, Escape, Energise, Engage and Entertain.

Examples of where these trends are making an impact include:

• Eat: The Hunter & Gatherer Market Precinct in Pacific Epping shopping centre where street food style stalls and Instagram-worthy cafes combine to deliver a vibrant dining experience, turning the centre into a social hub.
• Escape: The Rooftop Oasis & Urban Garden in Westfield Mt Gravatt shopping centre where a lush, calm, nature-infused retreat is on offer for visitors to unwind, meet friends or work remotely.
• Energise: Virgin Active Wellness Club at Westfield Bondi Junction brings premium fitness and holistic health to the shopping centre. Weaving active lifestyle offerings into the retail environment makes the centre a daily destination, not just a shopping trip.
• Engage: Immersive art exhibition ‘Lost & Found’ by Cj Hendry transformed Chadstone Shopping Centre into a captivating multi-site art experience.
• Entertain: ‘The Social Quarter’ in Chadstone Shopping Centre featured the Malibu Barbie Cafe activation with immersive VR experiences and family friendly entertainment zones offering playful Instagram-worthy experiences to dive foot traffic and social sharing.

Looking ahead, Ms Bailey notes that sport-led activations are emerging as a powerful new driver of engagement in shopping centres - with basketball courts already taking shape and concepts such as futsal pitches, pickleball arenas and pop-up tournaments increasingly being explored.

“A recent example includes the DA for a three-court basketball stadium at Forest Hill Chase in Melbourne, developed in partnership with Nunawading Basketball and Basketball Victoria. Similarly, Emporium Melbourne’s rooftop Stephen Curry Court, part of Rebel’s flagship wellbeing destination, brings an NBA sized court to the city skyline, merging sport and retail in a uniquely interactive way.

“These activations mark the next evolution for regional shopping centres, transforming them into true community hubs that encourage longer visits, attract broader audiences and blur the lines between retail, recreation and lifestyle,” Ms Bailey added.