This was the largest retail completion in Adelaide in Q1

It was a shopping centre spanning 4,400sqm.

There were three project completions recorded in Adelaide’s retail property market in 1Q23, totalling 10,400 sqm. According to JLL, the largest project completion was the neighbourhood centre Aston Hills Shopping Centre (4,400 sqm).

Vacancy trended down in the CBD, neighbourhood and sub-regional sub-sectors in 4Q22, while increasing in the regional and large format retail sub-sectors.

Here’s more from JLL:

Retail trade growth remained strong, supported by a strong labour market. Rolling annual retail trade growth was 9.8% in February, driven by increased trade in the discretionary categories of fashion (18.7% y-o-y) and dining out (11.9% y-o-y).

While expansion activity from retailers has been more cautious compared to during the early COVID-19 period, new store openings are still being recorded. US fashion retailer TK Maxx opened its third SA store in the quarter at the Churchill Centre, while Mimco launched a new store at Adelaide Airport.

Yields continue to decompress in the Adelaide retail sector

Average rents across all sub-sectors were broadly unchanged in the quarter. Occupier demand remains generally positive for specialty stores in most enclosed centres.

Yields were unchanged in the CBD, neighbourhood and large format retail sub-sectors in 1Q23. There was moderate decompression recorded in the regional and sub-regional sub-sectors.

Outlook: Retail spending expected to slow as inflation persists

While strong employment figures have supported retail trade over the last 12 months, it is expected to moderate over the medium term. The impact of persistent inflation, coupled with the rapid escalation of interest rates, will likely diminish discretionary spending for many Australian households.

The forward-looking retail supply pipeline in Adelaide is very strong with 67,700 sqm of retail space currently under construction. All of this supply is expected to complete over the balance of 2023.

Note: Adelaide Retail refers to Adelaide's overall retail market.