2020 saw the retail sector in Australia recalibrate as lockdowns, trading restrictions and border closures impacted trading conditions and shifted consumer demand.
However, strong retail trade growth has bolstered the retail sector. Record growth in groceries and household goods sales drove investor demand for neighbourhood centres and large format retail. Spend is expected to remain elevated for the first half of 2021, offsetting the impact of lost sales from international tourists due to border closures.
Softer yields when compared to other commercial property sectors along with the opportunity to reposition retail assets to maximise rental growth presents good value to investors and may help support a recovery in retail transactions in 2021.
Changing patterns of consumer demand will drive opportunities for investors, landlords and occupiers alike.