Experiential retail assets emerge as defensive investment as agentic commerce threatens commodity-focused stores after a record transaction year.
The artificial intelligence revolution in shopping will accelerate rather than derail Australia’s transformation of retail centres into experiential destinations, according to new analysis from global property adviser JLL.
As Australian financial institutions prepare to launch AI-powered shopping platforms as early as June 2026, investors are placing record bets on the country’s shopping centres, with a record $14 billion in retail property transactions last year.
The seemingly contradictory trends reflect a critical shift in how sophisticated capital views the retail landscape: agentic commerce – where AI assistants handle the entire purchasing journey for commoditised goods – makes experiential retail assets more valuable, not less.
“Shopping centres have repeatedly demonstrated adaptability. The question isn’t whether A-commerce will change retail – it will – but whether our assets can evolve to capture the experiential spending that algorithms cannot replace,” said Richard Fennell, Head of Property Management Australia at JLL, which manages 360 shopping centres and retail precincts across the country.
“Retail centres which survived the GFC and eCommerce will also survive A-Commerce. The local shopping centre has evolved from just a place to buy things you need in one convenient spot – the good ones are now Community Engagement and Entertainment Centres, places to go to have a good time – as well as shop.”
The investment thesis acknowledges legitimate near-term challenges. Merchants adopting A-commerce platforms may lose direct customer relationships and valuable data, while retailers optimising for AI-driven discovery – what industry analysts call Agentic Engine Optimisation – may reduce physical store investments, potentially affecting secondary shopping centre performance.
Consumer adoption also faces hurdles around security, data privacy, and delegating spending decisions to algorithms. However, convenience has historically proven a powerful driver of technology adoption, as demonstrated by contactless payment systems that materially reduced barriers to spending.
Kate Low, Head of International Capital, ANZ at JLL, emphasised that limited retail opportunities across Asia-Pacific are amplifying Australia’s appeal to offshore investors.
“Investors are looking for defensive yields in an environment where traditional office assets face structural challenges and residential development remains constrained by planning regulations,” she said. “For investors, the calculations involve balancing technological disruption against demographic trends, urbanisation patterns, and the proven resilience of well-located experiential retail.”
Foreign investment in retail assets has increased post-COVID, primarily through joint ventures with Australian partners rather than pure offshore acquisitions. In 2025, 15% of sales involved some level of foreign capital across 15 transactions.
JLL’s analysis suggests A-commerce will make it easier to buy commoditised, highly substitutable goods online – optimising for price, availability and speed – but won’t replace the experiences people still want to leave the house for: dining, beauty, wellness, entertainment and everyday services.
Related Articles
