Neighbourhood centres, large-format projects dominate Sydney's 2026 retail pipeline

More than 130,000 sqm of retail space are currently under construction.

Sydney's retail market recorded positive rental growth across all major retail categories during the first quarter of 2026, supported by ongoing development activity and resilient occupier demand, according to JLL.

Three projects totalling 32,700 square metres were completed during the quarter, including the new 20,000-square-metre ECQ Outlet centre and extensions at HomeCo Tuggerah and Westfield Penrith.

JLL is currently tracking approximately 133,700 square metres of retail space under construction across Sydney. The largest share of the pipeline is concentrated in neighbourhood centres, followed by large format retail developments.

Gross rents increased across all retail subsectors during the quarter, with growth ranging from 0.5% to 2.0%. Large format retail recorded the strongest increase for the second consecutive quarter, rising 2.0%.

Investment transactions totalled AUD110.4 million across four assets. The largest sale involved The Albany Crows Nest at 101-111 Willoughby Road, which changed hands for AUD44 million.

Yields remained stable across all retail asset classes. Vacancy rates contracted across most retail categories during the second half of 2025, although sub-regional centres and large format retail assets recorded slight increases.

Looking ahead, JLL said rising household savings and continued labour market strength should support retail spending. However, growing consumer caution amid economic uncertainty may limit discretionary expenditure growth in the near term.