Ray White Group Head of Research, Vanessa Rader, has revealed that four of Australia’s six major capital cities have recorded substantial improvements in their CBD retail vacancy rates as foot traffic returns and retail confidence rebuilds.
“Adelaide leads the recovery with vacancy plummeting from 10.9 per cent in 2024 to 9.6 per cent in 2025, followed by Perth’s impressive drop from 14 per cent to 11.6 per cent,” Ms Rader said.
“Brisbane has continued its improvement from 13.0 per cent to 10.9 per cent, while Melbourne has shown encouraging signs of stabilisation, with vacancy improving from 10.0 per cent to 8.8 per cent over the 12-month period.”
However, Ms Rader said that Sydney presents a concerning reversal of this positive trend.
“Sydney’s vacancy has risen from 5.4 per cent in 2024 to 6.7 per cent in 2025 due to new retail spaces emerging across the survey area and notable tenant churn, suggesting competitive pressures in the nation’s premier retail market,” she said.
The research has uncovered distinct character profiles emerging in each CBD market, with an interesting divide between food-heavy and fashion-focused cities.
“Sydney maintains its position as the nation’s fashion capital, with clothing and soft goods representing 31.1 per cent of all tenancies, coupled with substantial personal goods retailing notably in the jewellery space at 25.8 per cent, including significant luxury retail presence,” Ms Rader said.
She said Perth follows a similar pattern with 27.2 per cent clothing representation and 19.1 per cent personal goods retailing, suggesting these markets have developed more sophisticated retail hierarchies.
In contrast, the remaining capitals demonstrate much heavier food retailing weightings, according to the research.
“When combining cafés and restaurants, specialised food, and pubs and bars, Canberra leads with food retailing representing 38.4 per cent of all tenancies, followed by Melbourne at 28.2 per cent and Brisbane at 25.7 per cent,” Ms Rader said.
“Sydney and Perth record much lower food representation at 14.4 per cent and 18.5 per cent respectively. This food-heavy composition in some cities reflects strategies to maintain vibrancy despite reduced office worker presence.”
Ms Rader highlighted that experiential retail is reshaping CBD dynamics with many new stores offering greater in-store activities or social media activations.
“PopMart’s collectible stores are drawing extensive queues in both Sydney and Melbourne CBD, attracting a wide range of visitor types with visible tripods and videos being recorded,” she said.
“These viral retail concepts, capitalising on TikTok trends and social media culture, demonstrate how modern retail success depends on creating interactive experiences rather than traditional shopping transactions.”
The correlation between office occupancy and retail performance remains evident across the data, according to Ms Rader.
“Adelaide and Brisbane’s stable and improving office markets align with retail recovery, while Melbourne’s challenging office environment with 17.9 per cent vacancy continues to pressure retail despite stabilising vacancy rates,” she said.
Tourism recovery is also supporting retail performance across major markets, with hotel occupancy data showing strong results across all cities.
“These tourism flows provide crucial weekend and evening retail activity that complements weekday office worker spending,” Ms Rader said.
The data suggests Australian CBD retail is entering a new phase where cities with diverse retail offerings are outperforming markets dependent primarily on food activation.
“The fundamental divide between fashion-focused markets like Sydney and Perth and food-heavy cities such as Canberra, Melbourne, and Brisbane reflects different approaches to CBD activation, with varying degrees of success in attracting sustained foot traffic and premium tenants,” Ms Rader said.
