Australia retail transaction volumes hit AUD1.8b in Q3

Syndicators were the least active buyers during the quarter.

According to a recent JLL report, retail project completions in Australia totalled less than 12,000sqm across three projects in 3Q22, down from 46,200 sqm across nine projects in 2Q22. 

“Global supply chain disruptions, shortages of labour and rising construction costs continue to cause major delays to the retail supply pipeline in 3Q22 and throughout much of 2022,” the report added.

Here’s more from JLL:

The retail leasing market remained mostly flat in 3Q22, as retailers face heightening cost pressures. Across the sub-sectors over the most recent quarter, nationally there were no significant movements in rents except for the CBD sub-sector, albeit to a lesser extent than previous quarters. This indicates that the market is reaching a point of equilibrium where rents are likely to re-base soon. 

Transaction volumes totalled AUD 1.8 billion in 3Q22, slightly down from AUD 1.9 billion recorded in 2Q22. Notably, the types of active buyers over the quarter have been narrowing down, with syndicators being the least active over 3Q22 given their susceptibility to rising debt costs. Local REITs also remained cautious throughout the quarter with only SCA and Newmark acquiring assets. 

However, offshore investors continued to express interest in the Australian retail market given its relative economic stability in comparison to other developed nations. Offshore investors were net buyers of AUD 484 million and accounted for 29% of total sales volume in 3Q22.