LFR proves resilient as sector adapts to growth and changing consumer demand
Australia’s Large Format Retail (LFR) sector continues to demonstrate its resilience, supported by strong tenant demand, investor appetite and the ongoing evolution of retail formats and customer experiences.
These themes were explored during Ray White’s Between the Lines Live webinar on 13 August, hosted by Ray White Head of Research Vanessa Rader and featuring Alex Capra, Head of Leasing and Development at Harvey Norman, and Julie Ryan, CEO of Ray White CSR.
The discussion examined the forces currently shaping Large Format Retail, including constrained development pipelines, changing store footprints, tenant curation, mixed-use opportunities and the growing focus on experience-led retail precincts.
Accounting for roughly one-third of Australia’s retail space and approximately $1 in every $4 spent at retail registers, Large Format Retail remains a significant part of the national retail landscape.
Despite limited transaction volumes due to a shortage of available assets, the panel highlighted continued investor demand across institutional buyers, syndicates and private capital.
“Yields and returns on Large Format Retail assets are currently outperforming standard enclosed shopping centres, industrial warehousing, and CBD office spaces,” Ms Ryan said.
“The strength of the sector lies in its tenants. In Australia, Large Format Retail retailers have robust balance sheets, strong consumer appeal, and product offerings that are inherently resilient against e-commerce disruption.”
The webinar also examined one of the sector’s key challenges: finding and delivering suitable new retail space in high-growth areas.
Rising land and construction costs, competing land uses and lengthy approval processes are making traditional greenfield development increasingly difficult, prompting retailers and owners to consider different approaches to expansion.
Mr Capra said flexibility was becoming increasingly important, with retailers adapting store footprints, layouts and operational models to suit available sites and individual catchments.
The panel also discussed the importance of carefully curating tenant mixes as Large Format Retail precincts evolve beyond traditional retail uses.
Fitness, wellness, quick-service restaurants and other complementary offerings are increasingly forming part of the conversation, alongside opportunities to integrate Large Format Retail into broader mixed-use developments.
Looking ahead, the panel expects the repositioning and re-tenanting of existing centres to remain a key focus, particularly as development constraints increase the value of well-located established assets.
The discussion also considered how national and international retailers are experimenting with different store formats and footprints to reach customers in new locations.
The full Between the Lines Live discussion explores these themes in greater detail, including the implications for retailers, owners, developers and investors across the Large Format Retail sector.
Watch the full webinar, now on YouTube here and Spotify here.
