Queensland’s retail property sector continues to display resilience amid broader economic headwinds, supported by strong consumer spending and limited new supply. The first half of 2026 has seen significant retail asset transactions, maintaining momentum following a robust 2025 performance.

Research by Knight Frank shows that commercial property transaction volumes slowed to $7.3 billion in the first quarter of 2026, yet retail accounted for nearly half that total at $3.6 billion. Retail assets led commercial property sectors in total returns in 2025, delivering annual gains of 9.2 percent. Despite rising interest rates and geopolitical tensions, particularly the conflict in Iran, which has contributed to cost-of-living pressures, household spending remains relatively strong. Retail centres anchored by major supermarket chains such as Coles and Woolworths are benefiting from this consumer demand.

Knight Frank senior economist Alistair Read highlighted that retail has entered a period of uncertainty from a position of strength, citing supply-side constraints, population growth, and improving income fundamentals as key structural supports. CBRE research confirms that most shopping centres feature two to three supermarkets, accounting for around 11 percent of gross lettable area (GLA), typically 8,500 square metres, sometimes reaching up to 13,000 square metres.

The presence of “mini majors” such as Chemist Warehouse, Cotton On, JB Hi-Fi, and Rebel further underpins shopping centre strength, usually occupying about 15 percent of GLA. Vacancy rates are tightening, with 60 percent of retail centres reporting vacancies at or below 5 percent. Leasing spreads have returned to positive territory following a Covid-related slump, signaling improving market conditions.

Looking ahead, CBRE and Knight Frank project continued strong retail sector performance through this decade. CBRE forecasts retail sales will reach $530 billion by 2030, representing a 55 percent increase, fueled by ongoing population growth and a robust jobs market. Smaller neighbourhood centres have led investment returns over the past decade at 9.4 percent per annum, but larger retail centres are expected to experience the most significant rebound, potentially achieving 9 percent annual returns going forward.

Simon Rooney, CBRE’s head of retail capital markets for the Pacific region, noted a “flight to quality” trend in retail similar to that seen in office markets. Investor focus is increasingly asset-specific, favoring core, high-quality retail properties with sustainable income and growth prospects as critical determinants of value.

Retail centres that diversify beyond traditional retail offerings also show stronger performance. CBRE research points to the growth of wellness hubs and experiential retail—“Instagrammable experiences”—which help attract customers. Contrary to perceptions of e-commerce undermining physical retail, the sector is adapting by integrating click-and-collect options, which often encourage additional in-person purchases. E-commerce is estimated to grow at a sustainable 0.6 percent annually, currently accounting for 15 percent of total retail turnover.

Consumer spending is shifting toward experience-based categories such as wellness, health, recreation, and apparel. CBRE reports these sectors have increased their share of consumer wallets by 8 percent over the past 20 years, offsetting declines in alcohol and tobacco expenditures.

Queensland, in particular, benefits from strong investor capital inflows coupled with a constrained pipeline of new retail space. CBRE data estimates that 700,000 square metres of shopping centre supply will be added nationwide between 2026 and 2028, with New South Wales receiving the largest share (48 percent, or 336,000 square metres) and Queensland 22 percent (154,000 square metres). This limited supply relative to population growth underpins positive market fundamentals in the Sunshine State’s retail property sector.