This evolution from simple warehouses to complex community hubs was the focal point of a benchmark industry webinar, "Large Format Retail 2026 and Beyond," hosted by Julie Ryan of RWC (Ray White Commercial) CSR and moderated by Vanessa Rader, Head of Research at Ray White.
The scale of the industry is difficult to overstate. Philippa Kelly, CEO of the Large Format Retail Association (LFRA), revealed that Australia now boasts 21.6 million square meters of LFR floor space, an area more than 110 times the size of the retail component of Chadstone Shopping Centre.
This massive footprint supports over 470,000 jobs, making it a cornerstone of the national economy. However, as Kelly noted, the sector’s growth is currently navigating a gauntlet of property tax complexities and looming ACCC merger reforms set for 2026, which the LFRA is actively contesting to protect member interests.
A primary driver of the sector's resilience is the "sticky" nature of its occupants. Julie Ryan explained that LFR has become a premier asset class because tenants rarely fluctuate.
"LFR is an asset class of immense attraction because tenants simply don't want to leave," Ms Ryan said. "Due to constrained supply, retailers know that if they vacate a prime spot, they may never find another like it. Even when the market shifts, we see 'rightsizing' - subleasing a portion of space - rather than total exits. They want to stay where their customer base is established."
This stability is bolstered by modern consumer habits; with the average household now containing 32 Wi-Fi-enabled items, the demand for the electronics and home goods sold in these centers shows no sign of waning.
This demand is forcing a radical rethink of physical design. Phil Shutrop, Principal at Buchan Architects, argued that the future of LFR lies in "human-scale" environments rather than sprawling asphalt strips. The industry is moving toward a cluster of lifestyle uses, integrating experiences like climbing gyms, surf parks, and bike hubs to give customers multiple reasons to visit.
"Australia is leading the way globally in integrating these centers with the community," Mr Shutrop said, explaining that showrooms are becoming smaller, high-experience spaces that rely on off-site fulfillment for delivery rather than on-site inventory.
However, the path to this lifestyle-centric future is met with significant development hurdles. Alex Capra, Head of Development and Leasing at Harvey Norman Holdings, highlighted that developers are increasingly squeezed by competition from residential and industrial sectors.
Planning constraints, inconsistent zoning definitions across states, and rising construction costs have driven economic rents for new developments to be 20 to 40 per cent higher than existing market rates. Capra and Kelly both emphasised that for LFR to thrive, regional and metro councils must recognise its role as critical community infrastructure rather than just "bulky goods" storage.
As the industry looks toward 2026, the consensus among these leaders is that Large Format Retail is no longer just a place to buy a sofa - it is a sophisticated, lifestyle-driven asset class that is essential to how Australians live, shop, and socialise.
