sydney luxury retail continues to grow february 2024
Vacancy rates along the Pitt Street mall precinct have dropped to zero, having reached eight per cent last year. Image: Canva.
  • Vacancy rates for Sydney's prime retail core have dropped to 8.3%.
  • The Pitt Street mall precinct has seen vacancies drop to zero.
  • King Street comprises 70.6% luxury retailers.

Sydney’s retail sector continues to improve, with occupancy rising across the past 12 months, according to Ray White’s Vanessa Rader.

The latest Ray White survey found that Sydney’s prime retail core recorded an 8.3% vacancy, down from 10.2% in January last year. The Sydney prime retail core is bounded by Martin Place, Castlereagh, George, and Park Streets.

While the retail core recorded a nearly two percentage point fall in vacancy rates, the super prime area, the Pitt Street mall precinct, recorded zero vacancy, having recorded an eight per cent vacancy rate last year.

Lap of luxury

The proportion of shops surveyed saw luxury retailers account for 25.7%, up from the 12 months prior when 23.3% of shops surveyed were luxury retailers.

Largely comprising international retailers, particularly clothing, footwear, and other personal goods such as jewellery, bags, and other soft goods, the sector is most concentrated along King Street.

The survey found that 70.6% of King Street comprised luxury retailers. A glance at a map shows the street is home to names such as Tiffany & Co, Jaeger-LeCoultre, Louis Vuitton, Cartier, and more.

King Street the epicentre of Sydney luxury

The percentage number of shops within prime retail core, by street. Source: Ray White.

“The growth in luxury retailing does not align with the overall change in sentiment surrounding retail turnover, however, the ongoing growth in tenancies in this segment is testament to the high profile Sydney CBD location on the world’s stage,” said Rader.

Rader highlighted the fact that Sydney is often the city of choice for major brands to either establish their sole Australian location or provide a flagship offering.

Vanessa Rader. Image: Supplied.

Further in Sydney’s favour are the over 800 international flights per month, with Rader noting that Sydney enjoys a circa 30% higher visitation than any other Australian city.

Of note, visitors from southern and central Asian regions are a key growth market, with Rader noting these visitors were a driving factor behind the Sydney luxury sector growth and ongoing vibrancy, growing away from traditional luxury locations of Castlereagh Street to extend down King Street into George Street.

Sydney prime retail core tenancy mix by number of shops

sydney prime retail core tenancy mix ray white 27022024
Source: Ray White.

More broadly, the retail sector has seen little change to the composition of the Sydney CBD’s core retail area.

Clothing and soft goods rose from 31.1% last year to 33.2% this year. Rader said the two driving factors were growth in footwear and women’s fashion. Similarly, the other personal and household goods have increased due to some new jewellery and accessory stores.

Food and beverage continues to make a post-Covid improvement. Footprint is expected to grow as food retailers look to capitalise on growing weekday trade, particularly as staff return to CBD offices and the number of tourists and local shoppers grows.

“The service industry has been a big growth sector for retail, notably nails, finance, and hair services, particularly in local high street retail locations,” said Rader.

“In the Sydney CBD retail core we have witnessed a small decline this period, bringing the region back to a true retail experience of years gone by, where weekend window shopping, trying on clothes and stopping for a coffee was the priority rather than stopping in for a medical or beauty procedure.”

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