Australia’s CBD retail market is experiencing a dynamic resurgence, with a sharp uplift in foot traffic and renewed demand for prime retail space, according to Colliers’ latest CBD Retail Report.
As city centres across the country continue to stabilise post-pandemic, a combination of robust consumer activity, constrained supply, and shifting retail trends is reshaping the urban retail landscape, finds the report.
CBD foot traffic has rebounded to within 6% of pre-pandemic levels, according to the national report. Brisbane, Perth and Adelaide have already exceeded their 2019 benchmarks, while Sydney and Melbourne are steadily recovering, supported by major public transport infrastructure upgrades like the Sydney Metro Network and the revitalisation of key precincts such as Melbourne’s Bourke Street Mall.
“We are witnessing genuine positive momentum in Australian CBD retail,” said Michael Tuck, Colliers Head of Retail Leasing & Advisory, Australia.
“Constrained supply and steady rental growth are underpinning landlord confidence, while rising demand and tightening vacancies are creating healthy competition for space. Increasing foot traffic, fuelled by population growth, tourism and productivity gains, is further strengthening the market.”
Over the next five years, national retail development is projected to decline by approximately 72% compared to the volume of space added in the five years leading up to the pandemic. This has amplified competition for existing space, as few new projects are in the pipeline and population growth continues to accelerate. Retailers are facing longer wait times and increased competition for high-profile locations.
The report also highlights a decline in per capita retail floorspace, as population growth outpaces development. To maintain current supply ratios, an additional two million square metres of retail space, equivalent to nine Chadstone Shopping Centres, would be required nationally by 2035.
Colliers’ report also noted that online retail adoption in Australia has stabilised at 13 per cent, well below global counterparts such as the US (33.7%), China (31.2%), and the UK (23.2%). Australia’s measured adoption of online retail underscores the enduring appeal of physical retail and the experiential nature of Australian consumer behaviour.
“Rather than replacing bricks-and-mortar stores, online channels are increasingly complementing the broader retail ecosystem, with physical stores evolving into immersive brand experiences,” said Sam Ryan, Colliers Senior Research Analyst, Retail
“The outlook for CBDs is particularly promising, as they continue to evolve into vibrant, mixed-use precincts. Major infrastructure projects, including the Melbourne Metro Tunnel and Sydney’s new Metro Stations, are improving accessibility and activating new retail zones,” he said. Michael Bate, National Director of Retail Advisory, added: “Australia’s evolving CBDs reflect a retail market that is not only recovering, but redefining itself, while the retail landscape continues to attract strong interest from global brands and investors.”
