2025-04-17-莱坊-Australian_Retail_Review_April_2025_10页_1mb

Australian Retail Review Summary - April 2025

Core Content Overview

The Australian retail sector is showing signs of recovery and resilience in 2025, with improved household spending, stronger leasing spreads, and increased investment activity. The market is expected to benefit from easing inflation, a tightening labour market, and a return to growth in real personal disposable income, which is forecast to increase by 2.2% in 2025. This growth is anticipated to drive a 3.5% increase in retail sales for the year, with a 2.5% volume growth, indicating a rebound in consumer confidence and spending.

Retailer EBIT margins have remained firm, with many major retailers reporting strong profitability in the first half of 2025. This resilience is attributed to improved trading conditions and the positive impact of interest rate cuts on consumer spending. The top 20 shopping centres have seen a 5.5% growth in MAT (Management Agreements Turnover), highlighting a recovery in retail performance.

Key Trends and Insights

• Inflation Easing: Headline CPI in Australia has declined to 2.4%, within the RBA target band, leading to a 0.25% cash rate cut in February 2025. This is expected to ease pressure on household budgets and support consumer spending.
• Wage Growth: Annual wage growth remains elevated at 3.2%, helping to stabilise real incomes and support retail sales.
• Interest Rate Outlook: The RBA is expected to continue cutting interest rates, which will benefit consumer spending and the broader economy, including the retail sector.
• Retail Sales Growth: Retail sales are forecast to grow by 3.5% in 2025 in nominal terms and 2.5% in volume terms. This growth is attributed to improved consumer confidence and increased discounting during key periods like May and November.
• Younger Consumers: Younger consumers are expected to drive the increase in retail spending, as they are more likely to benefit from interest rate cuts and stabilised inflation.
• Investment Activity: Retail investment volumes reached $9.9 billion in 2024, up 39% from 2023, with 79% of transactions focused on shopping centres. Private capital accounted for 45% of acquisitions in 2024, but this is expected to shift as REITs and institutions increase their activity in 2025.

Shopping Centre Supply and Demand

• Limited Development: New shopping centre construction is minimal due to high costs and elevated interest rates. Major owners are focusing on optimising existing assets through extensions and refurbishments.
• Population Growth: Capital cities are expected to see faster population growth than regional areas, which will increase foot traffic and sales density for shopping centres.
• Per Capita Supply: The per capita supply of shopping centres is declining due to strong population growth and limited new supply, which is expected to support high MAT and visitation levels.

Capital Markets and Valuations

• Valuation Recovery: Retail valuations have returned to growth, with capital returns across all retail asset types showing improvement in Q4 2024.
• Yield Trends: Retail yields have stabilised at 5.7%, with less impact compared to office and industrial sectors, which saw larger yield increases.
• Total Return: Annual total returns on retail assets grew by 5.2% in 2024, driven by strong income growth (6.0%) and stabilising prices.

Market Outlook for 2025

• Major Retailers Active: Supermarkets and major retailers are becoming more active in the retail asset market, driven by competition for space and market share.
• Retail Specialists Dominant: Retail specialists are expected to dominate asset transactions, with non-specialist buyers facing challenges such as limited leverage and higher facility management costs.
• Mixed-Use Developments: There is a growing trend towards mixed-use retail developments, with state governments encouraging the redeveloping of existing retail assets into residential properties, enhancing their marketability.

Recent Transactions

• Westpoint Shopping Centre (Sydney): Sold for $900 million in January 2025, setting a record for the largest individual retail property transaction in Australia.
• David Jones Burke Street (Melbourne): Sold in December 2024 for $223.5 million.
• Kallo Town Centre (Kalkallo, VIC): Sold in December 2024 for $64.5 million.
• Cockburn Gateway (Success, WA): Sold in December 2024 for $300 million.

Conclusion

The Australian retail sector is on a positive trajectory in 2025, supported by improved economic conditions, increased consumer spending, and a return to growth in investment activity. While challenges remain, the outlook is increasingly optimistic, with retail specialists expected to lead the market and mixed-use developments offering new opportunities for growth and diversification.