Report | Intelligent Investment
Australian Shopping Centres Outlook 2026
CBRE Research examines retail sales growth, leasing performance, vacancy trends and investment returns to assess the outlook for Australian shopping centres in 2026 and beyond.
May 12, 2026 12 Minute Read
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About the Report
CBRE's 2026 Australian Shopping Centres Outlook draws on transaction data, rent benchmarks, vacancy metrics and macroeconomic forecasts across regional, sub-regional and neighbourhood asset classes.The report’s findings equip retail property owners, investors and occupiers with the data needed to make informed decisions on return, demand and supply dynamics shaping the sector.
What are the key findings for Australian shopping centres in 2026?
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Retail sales in Australia are near $443bn, 54% higher than 2015 spend of $287bn, and are forecast to grow to $530bn by end of the decade, supported by a triple boost of population growth, jobs growth and income growth.
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Occupancy cost ratios for retailers are lower than pre-2020 levels, particularly for Fashion and Services tenants, creating scope for rents to grow at mid-single-digit rates.
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Shopping centre supply is estimated at 0.7 million sqm over 2026–2028, primarily neighbourhood centres, with nearly 60% of shopping centres already exhibiting sub-5% vacancy.
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94% of Regional and Sub-Regional shopping centres have at least two daily-needs supermarkets, with eCommerce penetration forecast to grow from 14.6% in 2025 to 16.7% by 2029.
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Centres on larger sites, close to transport and in areas where residential rents are high may be early candidates for mixed-use redevelopment incorporating residential.
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Neighbourhood centres posted sector-leading investment returns of 9.4% per annum over the 10 years to 2026. Investment returns for regional shopping centres could double to approximately 9% per annum, led by rent growth.
What is driving demand for Australian shopping centre space in 2026?
The demand for consumer-facing real estate is expected to benefit from the triple boost of rising population, rising jobs and rising income. Collectively, this wealth effect is expected to add approximately $1,000bn income over the next decade from 2026 to 2035, a significant proportion of which is likely to be directed towards retail and leisure. Look good, feel good and travel well categories have taken an extra 8% share of wallet over the 20 years to 2025.Australia's population is forecast to grow, with immigration likely to contribute two-thirds, from 27.6 million in 2025 to 32.0 million by 2035, with average annual income rising from $105,000 currently to $144,000 over the same period. The employment market added 2.8 million workers between 2020 and 2025, with a further 2.9 million forecast by 2035.
How are retail occupiers performing financially, and what does the tenant mix look like in 2026?
Revenue and profit across retail occupiers grew by 3.5% in 2025, broadly in line with inflation. Sector-wide margins are approximately 5.5%.Occupancy cost ratios in regional and sub-regional shopping centres are lower than pre-2020 levels, with the reduction most noticeable in Fashion and Services categories, where median cost ratios have declined by approximately 2.5%, creating scope for specialty rents to re-grow over time. Mini-majors have continued to gain traction and now account for approximately 15% of gross lettable area, including retailers such as Chemist Warehouse, Cotton-On, JB HiFi and Rebel Sport.
When and how strongly will shopping centre rents grow in 2026?
Occupancy cost ratios for retailers are lower than pre-2020 levels, particularly for Fashion and Services tenants, creating scope for rents to grow at mid-single-digit rates through 2026. Rental growth for shopping centres in Perth could be in the high single digits during 2026.Re-leasing spreads in convenience and neighbourhood centres are tracking to mid single digit growth, and regional malls are now back to consistent positive growth.
How tight is shopping centre vacancy, and what does the supply pipeline look like through 2028?
Vacancy is trending back below 5% levels evident pre-2020, with nearly 60% of shopping centres already exhibiting sub-5% vacancy.The development pipeline of 0.7 million sqm over 2026–2028 is not keeping pace with the increase in population of 1 million over the same period. Future supply is concentrated in New South Wales at 48%, Queensland at 22% and Victoria at 15%. Recent geopolitical events could add 18% to construction costs over 2026–27, widening the chasm between rent and cost to build.
The supply outlook is heavily skewed toward neighbourhood developments, projected to account for approximately 69% of the pipeline through to 2028, with regional and sub-regional centres expected to total just 230,000 sqm over the three years from 2026 to 2028.
National shopping centre GLA per capita stands at 0.69 sqm per resident and is set to decline to 0.64 sqm by 2030.
What are the investment return and pricing trends for Australian shopping centres in 2026?
Investment activity has continued to show robust recovery with 2025 volumes at a record high, with a resurgence of institutional buyers adding liquidity into the sector.Neighbourhood centres had posted sector leading investment returns of +9.4% pa over the past 10 yrs, supported by cap rate compression and rising rents. Investment returns for regional shopping centres could double to approximately 9% per annum, led by rent growth, with scope for modest cap rate compression of approximately 10 basis points over the next three years from 2026 to 2028.
The top 25% of all centres generate over $11,000 per sqm of sales, according to CBRE Research analysis of approximately 380 shopping centres. Super-regional and city centre assets trade at cap rates 140 basis points and 100 basis points tighter than sub-regional centres respectively. Credit for retail real estate is approximately $115bn, growing at a compound annual growth rate of 8% per annum.
Which Australian shopping centres are candidates for mixed-use or residential conversion?
Expansion or redevelopment into mixed use, incorporating residential, offers valuable optionality. Centres located on larger sites, close to transport and in areas where residential rents are high may be early candidates for mixed-use redevelopment.Sources
CBRE Research, Australian Bureau of Statistics (ABS), Australian Prudential Regulation Authority (APRA), Property Council of Australia (PCA), Deloitte Access Economics, Real Capital Analytics (RCA), Shopping Centre News (SCN).
