Positive retail spends and landlord adaptation strategies continue to drive retail momentum
JLL Research has released its 2025 Australian Retail Shopping Centre Insights report, capturing feedback from shopping centre managers across the country. The report portrays a resilient outlook for the Australian retail sector, despite broader global economic uncertainty.
Authored by Ronak Bhimjiani, National Real Estate Economist at JLL, the report highlights the importance of adaptation and innovation for sustaining growth in Australia’s evolving retail landscape.
“The Australian retail sector demonstrates underlying strength, driven by positive consumer spending trends and innovative strategies employed by shopping centre managers,” Mr Bhimjiani said.
The report identifies four key themes shaping the current state of Australian retail shopping centres.
Key Findings:
Positive Sales Growth Outlook: The retail sector continues to portray resilience. Most respondents expect sales growth in the coming year, with 42% projecting growth between 3% and 6%. While modest, this indicates a still-optimistic outlook for the retail sector.
Divergent Consumer Spending Patterns: Services-based spending such as recreation, health and wellness as well as restaurants and dining categories are consistently reported as showing increased spend. Conversely, categories such as apparel, footwear, accessories, and household goods show a moderation in spend.
Digital Integration: Approximately half of survey respondents reported slightly stronger or much stronger use of online and click & collect services over the last 12 months, indicating the need for centres to continue evolving into multi-purpose hubs that cater to consumer needs.
Adaptation and Innovation: Several respondents discussed strategies for attracting consumers, including improved tenancy mix, integration of allied health services, marketing and promotions, and capital spend on centre presentation.
“Australian consumers remain resilient despite broader global economic uncertainty. Robust labour market fundamentals and the potential for a continued easing in Australia’s monetary policy setting support a stronger retail sales outlook over the next 12 months,” Mr Bhimjiani noted.
Rebecca Norton, Executive Director, Retail Property Management – VIC, said, “Competition to secure tenants remains tight, requiring landlords to continually adapt and innovate their strategies. A moderate outlook with a positive skew is expected for the second half of 2025, with most centre managers anticipating stable to marginally stronger retail leasing market conditions.”
The report concludes that strategic redevelopments, optimised tenant mixes, and enhanced customer experiences will be essential as centres adapt to evolving market conditions and shifting consumer preferences.
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