Australia's CBD retail markets are showing signs of recovery post-pandemic with luxury brands leading the charge, according to a recent national survey. Ray White said that Sydney and Melbourne are at the forefront of this trend, with Brisbane and Perth following suit.

"Sydney has transformed into a luxury retail hub, with a quarter of its shops representing high-end domestic and international brands," Ray White said. "This growth is fuelled by new upscale retail premises and increased spending on luxury items by both local affluent consumers and international visitors."

Sydney's prime retail core boasts the lowest vacancy rate at 5.8 per cent, followed by Melbourne at 10 per cent. The harbour city's luxury retail landscape is more dispersed, spanning King, Castlereagh, and George Streets, while Melbourne's Collins Street has consolidated its high-end offerings.

"Melbourne's Collins Street has solidified its reputation as a prestigious shopping destination, housing all major luxury brands in one strip," Ray White said. Brisbane and Perth are also expanding their luxury footprint, with Brisbane dedicating 9.8 per cent of its prime retail core to luxury brands, and Perth growing to 5.3 per cent.

"Brisbane's large prime retail core now dedicates 9.8 per cent of its shops to luxury brands, with Queens Plaza's influence extending to Edward Street," Ray White said. "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."

While Adelaide and Canberra lag in luxury retail adoption, new developments are providing opportunities for some brands to enter these markets.

The retail mix in CBDs has shifted in response to online shopping and COVID-19 impacts. Sydney and Perth lead in clothing and soft goods retail, occupying 33.5 per cent and 29.2 per cent of their retail mix respectively.

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

“ Canberra faces unique challenges, with the highest vacancy rate at 15.5 per cent. The capital has the highest proportion of eating establishments among surveyed cities, but struggles with attracting premium tenants due to varying quality of retail spaces.

Ray White noted an emerging trend in affordable luxury, stating, "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."

"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.”