CBRE

FIGURESIRETAILIQ32025

ascapitalpoursintoretailmarket

95.45.0%

consumersentimentMonthlyHouseholdspendingIndicator

september2025y-o-YJuly2025

$5,520

CBDsuperprimeNetFaceRents

Note:Arrowsindicatechangefrompreviousquarter.

keypoints

-

Householdspendinghasincreased10timesoverthepast11monthsbolsteredbyimprovingconsumerconfidence.

-

98.5inAugust.

-

assetsrecordedthehighestgrowthof1.3%q-0-q.

-

compressingbygbpandneighbourhoodandlargeformatcentrescompressingby6bpq-0-q.

Interestratecutshaveputdownwardspressureonyields,whilethereturnoflargerinvestorshaveseenthemarketbecomemorecompetitive,drivingdownyields.

-

Transactionvolumesforthefirstthreequartersoftheyearwerethehighestsince2016reflectingcontinuedstrongdemandforretailassets.

6.16%

Regionalcentreyields

FIGURE1:NetFaceRentGrowth

6.00%

5.00%

4.00%

3.00%

2.00%

1.00%

0.00%

-1.00%

RegionalCentre

Sub-RegionalCentre

NeighbourhoodCentre

LFRPrime

CBDSecondary

CBDPrime

CBDSuperPrime

y-o-yq-o-q

Householdspendhasincreasedninetimesoverthepast10months

Householdspendingrose0.1%inAugust,followingariseof0.4%inJulyand0.5%inJune.Household

spendinghasincreased10timesoverthepast11monthsbolsteredbyimprovingconsumerconfidence.

HouseholdsspentmorespentmoreonbookingairlinetravelandaccommodationservicesduringAugust,whichcontributedtoa0.5%increaseinservicesspending.Incontrast,goodsspendingfell0.2%aftermidyearsalesboostedspendingby0.9%inJune.

Thewestpac-MelbourneInstituteconsumersentimentIndexdeclined3.1%to95.4inseptemberfrom98.5inAugust.At95.4,thelatestIndexreadisstill2.5%aboveitsJulyleveland5.9%abovethelowseen

followingthetariffrelatedturmoilinApril.

yieldscontinuetocompressasinterestratecutshelpdrivedemand

shoppingcentreandlargeformatyieldscontinuedtocompressoverQ3withregionalcentrescompressingbygbpandneighbourhoodandlargeformatcentrescompressingby6bpq-o-q.Interestratecutshaveputdownwardspressureonyields,whilethereturnoflargerinvestorshaveseenthemarketbecomemore

competitive,drivingdownyields.Interestratecutssofarthisyearhavehelpeddemandforassetspopularwithprivateinvestors.Furtheryieldcompressionisexpectedoverthenext24months,withregionalcentresexpectedtoseemomentumaccelerateinthesecondhalfoftheyear.

NetfacerentsgrewacrossallsectorsinQ3exceptsecondarycBDlocations.Regionalcentreassets

recordedthehighestgrowthof1.3%q-o-q.continueddemandforprimeassetshasdrivendownvacanciesandishelpingkeeppressureonrentswithfurthergrowthexpectedover2026.

YTDtransactionvolumeshighestonrecord

InQ32025,therewere38retailtransactions(greaterthan$5million)totalingc.$2.093billion.Transactionvolumesforthefirstthreequartersoftheyearwerethehighestsince2016reflectingcontinuedstrong

demandforretailassets.Notabletransactionsthisquarterincludea25%shareinwestfieldchermsidefor$683milliontoDexusandJYGroup'sacquisitionofa50%shareinBankstowncentralfor$318m.These

regionalcentretransactionsreflectincreasedliquidityinthesectorandsignalsaresurgenceininstitutionalinvestorswhichwilldeepentheshoppingcentrebuyerpool.

FIGURE2:NationalyieldDeltabycategory

15.0

10.0

5.0

0.0

-5.0

-10.0

RegionalCentre

Sub-RegionalCentre

NeighbourhoodCentre

LFRPrime

CBDSecondary

CBDPrime

CBDSuperPrime

-15.0

y-o-yq-o-q

source:CBREResearch

CBDRetail

ReneweddemandignitesgrowthinsuperprimecBDfacerentsinNSWandQLD

superprimecBDretailfacerentsinsydneyandBrisbanesawaquarterly

increaseof2.5%and1.1%,respectively,signallingrenewedinterestinflagshipretaillocationsinmarketswithstrongunderlyingfundamentals.Thisuptickissupportedbyimprovingconsumerconfidence,areboundintourismand

constrainedsupply.Bycontrast,superprimecBDfacerentsinotherstatesremainedunchanged,asignofamoregradualrecovery,withrentalgrowthexpectedtofollowasoveralleconomicconditionsimprove.

stablerentsand,insomecases,slighty-o-ygrowthacrossmanymarkets

reflectstrengtheningconditionsinsuperprimecBDretailassets.Thistrendisunderpinnedbydecliningvacancyratesandanoticeableflighttoqualityamongtenants,showcasingtheongoingresilienceandadaptabilityofcBDspaces.

HospitalityandpremiumbrandsdrivecBDretailmomentum

Therisingcalibreofhospitalityandentertainmentofferings,pairedwitha

packedcalendarofsports,culturalandmusicevents,isakeycatalystbehindfallingvacancyratesacrossAustralia'SCBDretailmarkets.

InMelbourne,CBDretailrentalgrowthremainedstable.ongoingworks,

particularlyaroundBourkestreetandtheMetroTunnelhaveaffectingleasingactivityin2025,leadingtoreducedfoottrafficandtemporaryleasinghesitancyamongretailers.someretailershavedelayedexpansionorrelocationplansuntilconstructionconcludes.completionofthemetrotunnelexpectedinlate2025,combinedwiththerecentlyopenedwalkArcadeandMeccaflagshipispoisedtoboostretailvibrancyandreinvigorateleasingmomentum.

Meanwhile,anumberofflagshipstoreopenings(salomon,orotonandBassike)inQ32025underscorethestrongmomentuminsydney'SCBDretailmarket.

premiumandlifestylebrandsaredoublingdownonhigh-visibilitylocationstoboostfoottrafficandbrandimpact,whichinturncontributestostrongerrentalfundamentalsasdemandforprimeretailspaceintensifies.

WA

Q325

q-o-q

R

$2,830

stable

stable

Y

6.00%

stable

stable

FIGURE3:superprimecBDretailkeymetrics

Q325

q-o-q

$3,889

1.1%

5.4%

Y

5.25%

stable

stable

NSW

Q325

q-o-q

$11,104

2.5%

1.5%

Y

4.75%

stable

stable

Q325

q-o-q

y-o-y

R

$3,275

stable

stable

Y

5.00%

+25bp

+25bp

Legend

R-NetFaceRentsY-yields

VIC

Q325

q-o-q

$6,500

stable

stable

Y

4.00%

stable

stable

source:CBREResearch

FIGURE4:CBDRetailTransactionsbystate

FIGURE5:CBDRetailsupplybystate

2016201720182019202020212022202320242025

ACTNSWWQLDSAVICWA

NSWWVICWQLDWASA

source:CBREResearchsource:CBREResearch

FIGURE6:AustralianAveragecBDRetailyieldFIGURE7:RetailBuyerprofile

source:CBREResearch

Growingdemandforregionalcentressupportsnationalyieldcompression

RegionalshoppingcentrenetfacerentsexperiencedmildgrowthinQ32025,except

forperthrents,whichremainedstable.Melbourne'sregionalcentressawthestrongestgrowth,recordinga3.1%increaseq-o-q.sydneyfollowedwithq-o-qrentgrowthof

1.4%,whileBrisbanesawmarginalrentgrowthof1.1%q-o-q.Theongoingimbalance

betweenstrongdemandandconstrainedsupplyhascontinuedtodriverentalgrowthacrossregionalcentres.Regionalcentreyieldsnationallytightenedoverthequarterby9bpto6.16%(-7.6bpy-o-y).ThelargestyieldmovementwasseeninAdelaideand

perth,tighteningby15bpand12.5bpq-o-qto7.08%and6.13%.Melbourne,Brisbaneandsydneyalsorecordedyieldcompressionof6.9bp,5.7bpand5.0bp.

Limitedshoppingcentresupplytosustainstrongdemand

NewretaildevelopmentsupplydeliveredoverQ32025totalledapproximately11,600

sqm,downfromthe18,500sqmcompletedlastquarter.sub-regionalcentres

dominatedsupplythisquarter,accountingforapproximately62%oftotalstock

delivered.Thesupplyoutlookremainsheavilyfocusedonneighbourhood

developments,whichareontracktocompriseapproximately70%oftheprojected

supplypipelineuntil2027.Incontrast,regionalandsubregionalcentresareexpectedtoaccountforjust12%and18%shoppingcentresupplyrespectively.overthenext

threeyears,onlyc.183,000sqmofregionalandsubregionaldevelopmentsexpected

tobedelivered,withonlyonenewregionaldevelopmentinthepipelinecomingfrom

sydneytobecompletedin2027(c.21,300sqm).Assuch,existingcentresareexpectedtocontinueoutperforming,drivenbylimitednewsupplyandincreased

competitiveness.

Transactionvolumesdowncomparedtolastquarter

InQ32025,shoppingcentreinvestmentvolumesinAustraliareachedc.$1.4billion,

reflectinga22%decreasecomparedtothesameperiodlastyear.Thelargest

transactionoverthequarterwasscentreGroup's25%stakeinthewestfield

chermsidewholesaleshoppingcentreFundfor$683million.othernotable

transactionsincludetheJYGroups50%stakeinsydney'SBankstowncentralfor

$318.6millionandthechulloraMarketplaceinsydneytocharterHallfor$145million.

q-o-q

$1,865

+1.1%

+4.8%

Y

5.94%

-6bp

+4bp

FIGURE8:RegionalcentrekeyMetrics

WA

Q325

q-o-q

$1,384

stable

+3.3%

Y

6.13%

-13bp

-14.3bp

q-o-q

y-o-y

R

$1,600

+0.8%

+3.2%

Y

7.08%

-15bp

-13bp

Legend

R-RentsY-yields

NSW

q-o-q

y-o-y

$1,956

+1.4%

+4.8%

Y

5.70%

-5bp

-6bp

Q325

q-o-q

$1,554

+3.1%

+3.7%

Y

5.94%

-7bp

-1bp

source:CBREResearch

FIGURE9:AustralianshoppingcentreRetailTransactions

source:CBREResearch

FIGURE11:AustralianAverageshoppingcentreRetailyield

FIGURE10:AustralianshoppingcentreRetailsupply

FIGURE12:shoppingcentreBuyerprofile

source:CBREResearchsource:CBREResearch

Rentsbroadlystablewithstrongergrowthrecordedinsydney

Householdgoodsspendingincreasedby0.1%m-o-minAugust2025.1

WA

Q325

q-o-q

y-o-y

$250

1.10%

3.47%

Y

6.39%

-5bp

-11bp

Furnitureandhouseholdequipmentretailingsawspendingdown0.1%m-o-m.onay-o-ybasishowever,itrose3.7%comparedtoAugust2024.2spendingonbigtickethouseholditemsisexpectedtoimproveasconfidencebuilds

aroundfurtherinterestratecutsinearly2026.Renewedhousingmarket

activityandtheprospectoflowerborrowingcostsarelikelytosupportaliftinhighervaluepurchases.

primeLargeFormatRetail(LFR)rentsroseacrossallmajormarketsinQ3

2025,withtheexceptionofAdelaide,whererentsremainedstable.sydneyledrentalgrowth,increasingby1.2%q-o-qand9.0%y-o-ydrivenbystrong

economicfundamentalsandpopulationexpansion.Resilienthouseholdgoodsretailsales,tighteningavailabilityofprimeLFRspaceandincreasedretailerexpansionactivity,particularlyfromhomewaresandbulkygoodsoperators,arebeingsupportedbystronghousingmarketturnover.

NewretaildevelopmentcompletionsoverQ32025totalledapproximately

34,100sqm,markinganincreasefromthepreviousquarter.Thisadditional

supplyisexpectedtosupportmarketactivitythroughtilltheendoftheyear.

yieldscompressacrossthequarter

LFRyieldsnationallytightenedoverthequarterby5bpto6.19%.(-13bpy-o-y).Bymarket,yieldsstabilisedinallmarketsexceptperth,Brisbaneand

Melbourne,whichrecordedaq-o-qcompressionof5bp,12bpand10bprespectively·

Duringthequarter,$156millionofLFRassetstransacted,edgingabovethe$114mofLFRassetsrecordedinQ22025.ThelargesttransactionwasAPIL'ssaleofJoondalupGateEdgewater,WAwhichsoldforc.$79m.

FIGURE13:LargeFormatRetailkeyMetrics

Q325