Sydney CBD retail rents drop by nearly 10% in Q2 | Real Estate Asia

Sydney CBD retail rents drop by nearly 10% in Q2

This is the largest rental movement in this subsector.

According to data from JLL, retail rents across all sub-sectors in Sydney held flat on a q-o-q basis. Annually, the CBD sub-sector continued to record the largest movement with a decline of 9.81%. 

Excluding the CBD sub-sector which remained stable, all sub-sectors recorded yield softening. The neighbourhood sub-sector recorded the most significant q-o-q and y-o-y softening of 25 bps and 87 bps respectively.

Here’s more from JLL:

Retail spending remained broadly stable from the previous quarter. Discretionary spending categories recorded declines in spending, with consumers pulling back most significantly on household goods.

Retail leasing activity was resilient in the CBD, with established clothing brands continuing to expand their physical footprints.

Only one retail project reaches completion

Retail project completions remained subdued with only one neighbourhood centre totalling 18,000 sqm reaching completion in the quarter.

The supply pipeline is forecast to remain low over the rest of the year, with only five tracked projects due for completion.

Outlook: Minimal retail supply additions in H2 2023

The futures markets anticipate the RBA to raise interest rates further in 2023, and this is likely to drive further asset revaluations and yield softening.

Construction activity is expected to remain subdued over the latter half of 2023.

 

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