TROPHY BARANGAROO HARBOURFRONT RETAIL PRECINCT HITS MARKET
Sydney Harbour Retail at Barangaroo, achieving $28,000 per square metre, is being offered to investors as retail investment volumes surpass office and industrial for the first time on record.
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A tightly held stretch of Sydney Harbour waterfront retail has launched to market, with Sydney Harbour Retail at Barangaroo tipped to draw strong domestic and international interest.
Exclusively offered through JLL’s Retail Investments team of Nick Willis, Sam Hatcher and Sebastian Fahey, the asset marks the first time prime Barangaroo waterfront retail has been made available to investors.
The offering comes amid a structural shift in capital flows, with retail investment volumes overtaking those in the office and industrial sectors for the first time on record.
Owned by Marquette Property, the premium harbourfront destination comprises 20 tenancies across 2,600 square metres and boasts 175 metres of direct Sydney Harbour frontage within the $10 billion Barangaroo precinct.
Key tenants including Grill’d, Yo-Chi, Zushi, Lotus, Anason, Love.Fish, Muum Maam and Bourke Street Bakery are delivering productivity of $28,000 per square metre, about 60 per cent above industry benchmarks.
Nick Willis, Executive Director at JLL Retail Investments Australia & New Zealand, said: “2025 marked a turning point for the retail sector. For the first time on record, retail investment volumes outsold both office and industrial sectors, signalling restored confidence and deepening liquidity.
“As capital returns to the sector, we’re seeing a clear preference for assets that offer defensive income and exposure to experience-led spending.”
The property is fully leased under long-term net-lease structures with fixed 4 per cent annual rent reviews, offering predictable income growth. It also benefits from strong foot traffic, supported by approximately 18 million annual visitors to the precinct, 24,000 daily workers and the surrounding affluent mixed-use development.
Sam Hatcher, Head of Retail at JLL Australia & New Zealand, said: “The speciality performance of the asset at $28,000/sqm outstrips almost all major retail and dining precincts in Australia – a staggering 60 per cent above industry benchmarks, providing significant future rental reversion. The 100 per cent net lease structures provide bulletproof income growth potential.”
Connectivity via Barangaroo Metro, Wynyard Station, and nearby ferry terminals underpins the location’s appeal, while integration with luxury residential towers achieving sales rates of more than $90,000 per square metre and A-Grade office buildings creates a strong captive customer base.
According to JLL research, Sydney CBD retail vacancy has fallen from 14.3 per cent in the fourth quarter of 2022 to 3.4 per cent in the fourth quarter of 2025, the lowest level since late 2019. Barangaroo’s office vacancy rate of 4.2 per cent sits well below the wider CBD average of 14.7 per cent, further supporting spending within the precinct.
Designed by ASX-listed Lendlease, the Barangaroo development is Australia’s first large-scale carbon-neutral precinct and has received numerous national and international awards.
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Office rents in Sydney, Melbourne and Brisbane are climbing at their fastest pace since the pandemic as tenants compete for premium CBD space amid tightening supply.
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Australia’s major CBD office markets are recording some of their strongest rental growth since the pandemic, with businesses increasingly prioritising premium office space despite elevated geopolitical and economic uncertainty.
Knight Frank’s Australian Office Indicators Q1 2026 report found net effective rents in Sydney and Melbourne CBDs rose at their fastest annual pace since COVID-19, increasing 10.2 per cent and 6.8 per cent respectively over the 12 months to March.
Brisbane posted the strongest growth nationally, with net effective rents climbing 11.7 per cent over the same period.
The report points to a widening divide between prime CBD office towers and secondary office stock, as occupiers increasingly focus on quality, location and workplace amenity when making leasing decisions.
Knight Frank Senior Economist, Research & Consulting Alistair Read said demand remained heavily concentrated in premium assets within core CBD precincts, helping drive stronger rental growth in top-tier buildings.
“Occupier demand continues to be heavily concentrated in the most desirable CBD precincts and the highest-quality buildings, accelerating a sharp divergence between core and non-core markets,” Mr Read said.
According to the report, Sydney’s Core precinct and Melbourne’s Eastern Core significantly outperformed broader CBD markets over the past year.
“In Sydney’s Core precinct and Melbourne’s Eastern Core, net effective rents surged 14.3% and 16.1% over the past year, significantly outperforming the rest-of-CBD precincts,” Mr Read said.
The rental gap between prime and non-prime office locations has also continued to widen sharply.
“As a result, core CBD rents are now 54% higher than non-core locations in Sydney and 93% higher in Melbourne, highlighting the growing premium placed on amenity, accessibility and workplace quality,” he said.
Knight Frank said the strong rental growth across the major CBDs was being underpinned by a limited supply pipeline, with few new office developments expected to be delivered in the near term.
Mr Read said subdued construction activity was likely to support ongoing rental growth and tighter vacancy rates over the medium term, particularly for premium office towers.
“The combination of sustained demand and declining levels of new development will aid ongoing prime rental growth and lower vacancy rates over the medium term, particularly for best-in-class assets,” he said.
The report noted that current economic conditions were making new office developments increasingly difficult to justify financially.
“Economic rents remain well above expected market rents, making the construction of new office towers largely unviable, and concentrating tenant demand into existing buildings,” Mr Read said.
While suburban office markets generally remained subdued compared with CBDs, Melbourne’s Southbank precinct was identified as a relative outperformer, recording annual net effective rental growth of 2.7 per cent.
The report comes as broader Asia-Pacific office markets continue to stabilise following several years of disruption linked to hybrid work trends, inflation and rising interest rates.
Knight Frank’s separate Asia-Pacific Q1 2026 Office Highlights report found Sydney and Brisbane were among the strongest-performing office rental markets in the region, behind only Bengaluru and Tokyo for annual prime net face rental growth.
The Asia-Pacific report also found 18 of the 24 cities monitored across the region recorded stable or increasing rents in the first quarter of 2026, even as geopolitical uncertainty intensified following escalating conflict in the Middle East.
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