A recent national survey of CBD retail markets reveals promising signs of revitalisation of our CBDs after a quiet period post pandemic. Notably, there's been a significant increase in luxury retail presence, particularly in Sydney and Melbourne, with Brisbane and Perth’s growth trend following suit.

Analysis of prime CBD retail cores shows Sydney outperforming with a low 5.8 per cent vacancy rate, followed by Melbourne at 10 per cent. Sydney has transformed into a luxury retail hub, with a quarter of its shops representing high-end domestic and international brands.

This growth is fueled by new upscale retail premises and increased spending on luxury items by both local affluent consumers and international visitors. Sydney, attracting the highest number of overseas tourists with a penchant for luxury goods, continues to drive this trend.

Melbourne's Collins Street has also solidified its reputation as a prestigious shopping destination, housing all major luxury brands in one strip, unlike Sydney's more dispersed luxury retail landscape which includes King, Castlereagh and George Streets.

Brisbane and Perth have also expanded their luxury retail footprint. Brisbane's large prime retail core now dedicates 9.8 per cent of its shops to luxury brands, with QueensPlaza's influence extending to Edward Street.

Perth's luxury sector has grown to 5.3 per cent, bolstered by the high-quality addition of Raine Square in the CBD, attracting international brands never before seen outside of the east coast.

Adelaide and Canberra lag behind in luxury retail adoption with limited offerings. However, new developments are providing opportunities for some brands to enter these markets.

The gradual expansion outside the prime retail core in these cities mirrors early trends observed in Sydney, potentially signalling future growth of their retail hubs.

The retail landscape in Australia's CBDs has undergone significant changes in response to the rise of online shopping and the lingering effects of COVID-19. Many local consumers now prefer to shop at well-developed suburban retail centres which often offer the same retailers as our CBDs, reducing the appeal of city visits.

Despite these challenges, Sydney and Perth lead in clothing and soft goods retail, with this category occupying 33.5 per cent and 29.2 per cent of their retail mix respectively. These cities also show a balanced distribution of services, accounting for 16.5 per cent and 14.6 per cent of tenancies.

Sydney and Melbourne boast the highest concentration of personal and household goods stores, closely tied to the luxury sector, particularly jewellery. This segment is expected to grow in Brisbane and Perth inline with the uptick in quality brands into the CBD.

Canberra faces unique challenges, with the highest vacancy rate at 15.5 per cent. The quiet CBD hampers recovery, though recent improvements to the Canberra Centre have introduced some vibrancy and upscale dining options.

The capital has the highest proportion of eating establishments among surveyed cities. However, the prevalence of secondary shop fronts on malls presents obstacles. A mix of varying quality, often strata subdivided retail spaces in need of significant investment, has made attracting premium tenants difficult.

Services like optometrists and hairdressers dominate, representing nearly a quarter of shops, while clothing retailers have largely moved into the Canberra Centre.

All surveyed markets show a similar proportion of recreational goods retailers. This sector, which had previously diminished in CBDs, is making a modest comeback, offering entertainment products such as bikes, books, games, and cameras.

While traditional luxury items may be beyond the reach of many CBD shoppers, there's a growing trend of specialised, high-quality food retailers. Upscale pastry shops, nut stores, chocolatiers, and ice cream options are gaining popularity, offering consumers a taste of affordable luxury.

The quality of CBD retail offerings is crucial for attracting premium tenants and enhancing city vibrancy. Creating spaces that appeal to both locals and international visitors, combined with a strong weekday workforce, will ensure the long-term viability of our retail store fronts and support smaller local businesses in this post pandemic era.

**Prime retail core refers to a collection of streets surrounding the retail malls in CBD locations. This analysis represents a tenancy count based on number of shops**

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