Ongoing light rail construction and associated road works continue deterring both retailers and customers, though these infrastructure investments promise long-term connectivity improvements. The construction timeline means relief may still be months away, extending uncertainty for CBD businesses during a critical recovery period.
The city's luxury retail component remains virtually non-existent at just 0.6 per cent, unchanged from 2024, highlighting how major brands continue bypassing Canberra despite its affluent government workforce and its title of Australia’s capital city. The minimal presence in premium retail categories creates a stark contrast with other capitals where luxury expansion drives growth.
Visible challenges including increased homelessness are affecting CBD amenity, combined with reduced office worker presence creating a less attractive environment for both retailers and customers. Many CBD properties require substantial capital investment to meet modern retail standards, but current market conditions make such expenditure difficult to justify.
Tourism provides some support with hotel occupancy at 70.4 per cent, though this remains the lowest among capitals. The predominantly government-focused visitor profile limits retail spending compared to leisure tourism markets.
Canberra's retail sector faces a challenging path forward, dependent largely on factors beyond individual landlords' control: completion of transport infrastructure, evolution of public service work patterns, and broader urban amenity improvements.
