This article was first published in Shopping Centre News, 2026.

The past year reinforced something fundamental about the Australian retail landscape: well‑located, actively managed centres, underpinned by strong partnerships, continue to outperform – even as shopper behaviour evolves and macroeconomic settings shift.

As we move into 2026, sector sentiment has turned decisively positive. While 2025 was defined by a return to stability, the year ahead is when "operational alpha" – value created through hands‑on, insight‑driven management should move the needle favourably.

The most significant evolution has been the reshaping of the retail calendar. Historically a game of two halves, 2025 confirmed November as Australia’s peak trading moment. Black Friday is no longer a weekend event; it has redefined the peak period, eclipsing traditional Christmas and Boxing Day in both scale and strategic importance. Nationally, spending across the 2025 Black Friday period reached a record $23.8 billion, up 4.6% year-on-year. Crucially, the uplift extended across the month as retailers launched promotions earlier to capture demand and smooth operational pressures.

According to the ABS, retail sales rose 7.0% year‑on‑year to November 2025. While consumer sentiment softened in December on the back of inflation surprises, Dexus Research expects caution to ease as recent real wage growth gains will improve purchasing power into 2026, supporting a constructive sales outlook into peak periods.

We saw this dynamic play out across our portfolio, where combined November and December sales growth mirrored national trends. Assets such as QV Melbourne and Ocean Keys saw turnover surge, reinforcing that curated tenancy mixes and strong operations can amplify system‑wide tailwinds. Equally important, the nature of spend is maturing. Experience‑led categories, from travel to food catering, outpaced pure goods, signaling that modern shoppers view centres as much for services and connection as for consumption. The implication for 2026 is clear: omnichannel capability is no longer an add‑on; it is the essential foundation for growth.

With low vacancies, improved retailer profitability and attractive occupancy cost ratios, fundamentals are as strong as they have been in a decade. MSCI Real Assets showed unlisted retail wholesale funds were the best‑performing sector to Q4 2025, up 3.5% in the quarter and 10.0% p.a., outperforming the 7.6% p.a. return across all funds – clear evidence that the sector’s reset is translating into performance.

But with new greenfield supply constrained by planning controls, land availability and construction costs, outperformance increasingly relies on active ownership. The 2026 new‑build pipeline remains thin, with activity centred on refurbishments and extensions, particularly in regional centres, favouring owners able to invest in well‑located, stabilised assets and apply hands‑on management to unlock embedded potential.

Dexus is uniquely placed to lead in this environment and drive returns for investors. Today, our retail footprint spans around 20 centres and more than 90 convenience and fuel assets. Combined with our City Retail portfolio, embedded within premium office towers, we serve approximately 1,400 retailer customers across about half a million square metres of retail space. Our partnership with Scentre Group further differentiates us, providing advantaged insight and access across the sector.

In 2025, we embedded our position at Westfield Chermside – a market‑leading centre in a fast‑growing catchment. Holding a 50% Platform stake positions us to support precinct enhancement over time, illustrating our discipline in backing high‑quality assets with multiple pathways to value creation.

This intensive management style is best demonstrated by the repositioning of Indooroopilly Shopping Centre. By consolidating underperforming specialty stores into high‑productivity mini‑majors, introducing innovative concepts such as an Automall, re‑engineering access and ambience, and securing adjacent land for future mixed‑use, we delivered material uplift in productivity and returns. This is consistent with our in-house research, which shows service‑based retailing now exceeds a quarter of occupied floorspace in larger centres – up from approximately 10% a decade ago – a structural shift we are actively curating across the portfolio. The principle is simple: evidence‑based decisions and hands‑on execution drive results for our customers and investors.

Looking ahead, the decision engine for retail must be increasingly data‑led. We are building internal tools to guide capital allocation at the micro level: where does the next dollar earn the highest return – experience, amenity or a specific retailer? Combined with centre‑level analytics on traffic, sales productivity and adjacency, this approach sharpens customer‑centric choices and accelerates execution.

We also recognise that our centres are social infrastructure. In an age of digital fragmentation, physical marketplaces remain vital anchors. Whether it’s a morning coffee, a medical appointment or a leisure experience, our social licence is tied to how well we serve people every day. While mortgage settings and wage dynamics will continue to shape discretionary spend, we expect retail to surprise on the upside through 2026 as operational excellence differentiates performance. With yields converging across the sector and neighbourhood assets showing the most compression, Dexus Research sees regional and sub‑regional centres with strong offers as relatively more attractive, especially where there is scope to remix and densify.

Our focus for the year ahead is clear:

• Conviction‑led acquisitions: Lean into opportunities where pricing reflects quality and embedded optionality, supported by our ability to scale quickly across sub‑sectors.
• Operational excellence: Lift sales per square metre through smarter space deployment and friction reduction across the customer journey.
• Strategic development: Unlock mixed‑use potential that enhances centre relevance and capital efficiency, leveraging our joint venture with Scentre Group.
• Data integration: Embed our tools into day‑to‑day tenancy planning and marketing so every dollar of spend works harder for the customer.

Australian retail is not merely resilient; it is adaptive. By combining rigorous, data‑led decisions with operational excellence and the right partnerships, we are positioned to lead this next chapter for our investors and the communities we serve.

As conditions stabilise, 2026 is the year to execute with conviction – invest where quality is clear, manage intensively where uplift is available, and scale what works.