Record high investment in resilient shopping centre sector

Investment in Australia’s retail sector hit $12.7 billion in 2025, with investors attracted to a sector with limited supply pipeline, mid-single digit rental growth, and consistent consumer spending, new CBRE research shows.

CBRE’s Australian Shopping Centres Outlook report shows Regional shopping centres attracted the most investment with $6.8 billion in 2025. CBRE forecast investment returns for Regional shopping centres could double to ~9% pa, led by rent growth.

CBRE’s Head of Research, Pacific, Sameer Chopra said, “There were great transaction volumes in 2025 which reflect growing investor confidence in the resilience of Australian shopping centres, supported by improving rental fundamentals and a tightly constrained supply pipeline.”

Head of Retail Capital Markets – Pacific, Simon Rooney noted, “2026 has seen a continued drive in investment activity, with several large transactions in due diligence including a 50% interest in Westfield Marion in Adelaide and 100% interest Greensborough Plaza in Melbourne, reinforcing positive investor sentiment for high quality, dominant regional assets. Overarching investor sentiment remains positive, performance is expected to become increasingly asset specific, with a flight to core, high quality retail holdings, with income sustainability and future growth playing a central role in pricing outcomes.”

“Both institutional and private investor engagement and appetite for high-quality retail assets remains resilient, as demonstrated via current CBRE-managed on-market sales processes including Frasers Property Australia Sydney retail holdings at Ed.Square Town Centre and Eastern Creek Quarter, and Adelaide’s Rundle Place,” Mr Rooney continued.

CBRE estimates 0.7 million sqm of shopping centre supply will be delivered from 2026 to 2028, which is not keeping pace with the increase in population of 1 million over the next three years.

Future supply is concentrated in New South Wales (48%), Queensland (22%) and Victoria (15%). Looking ahead, the supply outlook remains heavily skewed toward neighbourhood developments, which are projected to account for circa 69% of the shopping‑centre pipeline through to 2028.

“We’re seeing that consumer spending is resilient which bodes well, especially as occupancy costs are still below 2020 levels. This gives us confidence around mid-single digit rent growth over the next 3-5 years. Supply in inner-metro markets is constrained and likely to be revised lower due to rising construction costs. Vacancy has already been tightening creating a structural tailwind for existing shopping centre owners,” Mr Chopra added.

The report shows nearly 60% of shopping centres have sub 5% vacancy. This is particularly the case for recent builds incorporating modern retail formats and upgraded food/customer experience.

CBRE Director, Retail Tenant Representation Sam Embling said, “Leasing fundamentals remain strong, with sustained demand from both international entrants and domestic retailers. The market continues to be characterised by limited new supply and tightening vacancy, supporting a positive outlook for shopping centre leasing.”