FY25 marked a turning point for the Australian retail real estate market, characterised by a sharp increase in buyer activity, renewed confidence in larger-scale assets, and a series of landmark transactions signalling a clear return to growth.
Latest research from Stonebridge Property Group reveals that total retail investment volumes reached $8.7 billion in FY25, a 41% increase year-on-year and well above the 10-year average of $7.5 billion. A total of 97 major retail assets ($10 million and above) transacted, with New South Wales leading the way in total volume, followed by Victoria and Western Australia.
Regional Centres were the most traded asset class by value, accounting for 39% of total volume, followed by Neighbourhood Centres (23%) and Sub-Regional Centres (22%).
Justin Dowers commented ” After a period of recalibration, we saw a clear resurgence in investor appetite, not just for convenience-based centres but also for larger-scale assets. The weight of capital returning to the sector is a strong indicator of confidence, particularly in the resilience of non-discretionary anchored retail.”
Philip Gartland commented “The Bunnings investment market was one of the clear standouts in FY25. Yields sharpened to levels we haven’t seen since 2020, underpinned by strong demand, limited supply and the excellent appeal of the Bunnings covenant. Investors are increasingly viewing these assets as a core part of their defensive retail strategies, and we expect this momentum to carry well into FY26.”
Carl Molony commented “Investor sentiment has clearly shifted. We’re seeing increasing competition across our campaigns nationally, and a noticeable return of interest from offshore capital seeking quality retail property either as capital partners to local sector focused managers or in their own right.”
Looking ahead, momentum is building into FY26. Early interest rate cuts and a more supportive economic environment are expected to fuel further activity.
Key tailwinds driving the market include:
- – Strong population growth supporting retail demand
- – Limited new retail supply tightening leasing markets and boosting rental growth
- – Shrinking bid-ask spreads improving transaction feasibility
Institutional and offshore capital is actively re-engaging, with several major groups increasing their deployment. As competition intensifies, well-located, non-discretionary anchored assets with long WALEs are expected to remain highly sought after.
To access the full list of FY25 sales or to discuss investment opportunities for FY26, please contact the Stonebridge team.
Stonebridge Property Group’s retail investments team brings over 100 years of combined experience and has successfully transacted more than $4 billion in major retail investments nationally over the last 5 years. The team specialises in neighbourhood shopping centres, supermarkets, sub-regional centres, large format retail, and Hardware (Bunnings) assets.
About Stonebridge
Stonebridge Property Group is a national commercial real estate agency offering market leading knowledge and expertise from some of Australia’s best known and most highly regarded agents with a focus on the retail and development site sectors as well as our specialised Asia Practice division. Please visit our website at: www.stonebridge.com.au
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