Sydney’s CBD retail vacancy rose from 5.4 per cent last year to 6.7 per cent this year, with recovery lagging behind other Australian cities, according to research from the Ray White Group.
Vanessa Rader, head of research at Ray White Group, said the increase in vacancy was due to new retail spaces emerging across the survey area and a high tenant churn, pointing to competitive pressures in prime retail locations.
Adelaide led the recovery with vacancies dropping from 10.9 per cent to 9.6 per cent year-on-year, followed by Perth, where vacancies fell from 14 per cent to 11.6 per cent, Brisbane, which saw vacancies decrease from 13 per cent to 10.9 per cent, and Melbourne, where vacancies improved from 10 per cent to 8.8 per cent.
Rader said Sydney maintained its position as the country’s fashion capital, with clothing and soft goods accounting for 31.1 per cent of all tenancies, along with personal goods retailing, specifically in the jewellery space at 25.8 per cent, and a large luxury retail presence.
Perth demonstrated a similar pattern with clothing representing 27.2 per cent of retail tenancy, followed by personal goods accounting for 19.1 per cent.
In Canberra, 38.4 per cent of retail tenancies were attributed to food retailers, followed by Melbourne at 28.2 per cent and Brisbane at 25.7 per cent, reflecting strategies to maintain vibrancy despite a reduced workforce.
Viral retail concepts inspired by TikTok and social media trends have reshaped the CBD dynamic, particularly in Melbourne and Sydney, determining modern retail success.
Services represent 21.9 per cent of tenancies in Canberra, 18.7 per cent in Brisbane, 16.4 per cent in Melbourne, 14.8 per cent in Sydney, and 14.5 per cent in Perth, reflecting differing economic foundations in each city.
The data found a correlation between office occupancy and retail performance, with Adelaide and Brisbane stable office markets aligning with retail recovery, whereas Melbourne’s challenging office environment continues to pressure its retail recovery.
