2025 is shaping up to be an important year for Australian retail, and at QIC, we’re feeling optimistic and ready for what’s ahead. Recent years have not been without challenges, marked by economic headwinds weighing heavily on consumer confidence. But the tide is turning. Income tax cuts, other fiscal support measures, slowing inflation and likely interest rate cuts in the first half of 2025 are expected to lead to an improvement in real disposable incomes, which will help promote a consumption-led economic recovery in Australia during 2025.

At QIC, we anticipate that retail sales growth will improve from 1.6% in FY24 to 3.0% in FY25 and 3.6% in FY26. With population growth forecast to remain solid over the longer term and limited supply of new retail space in the pipeline – low vacancy rates are expected and improving rental growth should outstrip productivity growth. Signals of these stronger fundamentals are evident across our portfolio of shopping centres, with vacancy rates and occupancy costs at all-time lows, and total sales at historic highs. Given these conditions, coupled with greater confidence in asset valuations, we’re seeing improving investor sentiment for retail, and a window through which to access rare, high-quality properties has also opened. We have seen this in QIC’s successful divestments of Claremont Quarter in Perth and Westpoint in Sydney which, at $900 million, was the largest individual retail transaction in Australian history.

The resilience of the Australian retail market is evident, and the outlook is bright. At QIC, we are ready to capitalise on the opportunities these conditions present, but without taking our eye off the operational priorities that come with managing some of Australia’s largest shopping centres.

Every opportunity we have as an industry to collectively improve the safety and wellbeing of all those that visit and work at shopping centres across Australia is invaluable. This is why we are proud to be playing a role in the industry-wide effort to improve security measures in these centres.

In 2024, we conducted a wide-ranging review of security measures in the centres we manage. Just some of the actions already taken include implementing slash-proof vests, body-worn cameras, and additional Active Armed Offender training.

The advancement of AI in shopping centre security will change the game in 2025. Our industry-leading Safeguard program, launched in 2022, uses state-of-the-art technology, with sophisticated camera analytics, to monitor and alert centre security and first responders of those at risk of potential self-harm or security threats. Through AI, this Safeguard program is getting better and better at predicting concerning events, enhancing our ability to prevent incidents before they occur and protect the safety of our customers. This proactive approach is crucial in ensuring a safe and secure environment for our customers.

As Australia’s population grows, so too does the need for community infrastructure. We believe that QIC’s portfolio of highly productive retail assets, with their prime locations in some of Australia’s fastest growing LGAs, can act as canvases for these communities. This is why we have strategically acquired land adjoining these assets, introduced and upgraded transport infrastructure, and worked in partnership with local and state planning authorities to unlock zoning, density and height limits. We are now introducing (or advancing plans to do so) living, office, education, healthcare, and other mixed-uses at our retail centres. We are creating precincts that serve the broader commercial and social needs of our communities, unlocking hidden value, uplifting productivity, and providing investors with opportunities to access multi-asset style investments.

Eastland (VIC) is one of the best examples of this mixed-use precinct evolution. For some time, we’ve been introducing new uses within and around the asset to create a commercial and civic hub for Melbourne’s outer-east. We’ve introduced a town square, hotel, office towers and co-working facilities, upgraded retail and dining experiences and supported the expansion of the nearby train and bus interchange. Since 2021, this mixed-use strategy has delivered double digit increases in traffic, income and productivity.

The constrained construction environment of recent years has weighed on project feasibilities for the whole industry, but that has not meant we have sat still. Beyond the introduction of an Aquatic Centre and a mixed-use office building at Merrifield City (VIC) in early 2024, the QIC team has been busy firming up plans for projects across the portfolio. We are in advanced planning stages for a significant build-to-sell residential development at Robina Town Centre (QLD), to be delivered in joint venture with Cedar Woods. We will also soon open a five-storey commercial building at Eastland and masterplanning continues across Brisbane’s four Cross River Rail precincts.

Come 2027, continued population growth, solid consumer fundamentals and a stabilised construction environment will see development activity return full throttle. We will be ready.