Tareela Insights - 23 Feb 2026

Sydney’s CBD retail vacancy has tightened again. CBRE reports it was down 78 basis points in H2 2025 to 4.3%.

Arcade spaces are leading the charge, with the Dymocks Building filling boutique tenants like Diamonds Factory Australia. Strip retail and shopping centres aren’t far behind.

Basically, the places everyone actually walks past are getting snapped up. Why? Foot traffic is finally behaving like it’s supposed to.

The Metro and light rail have shuffled people around the CBD, office workers are back, tourists are wandering and people are hanging around for longer. Limited new supply and healthy household spending add fuel to the fire. Put simply, prime CBD locations are now like Aussie Open finals tickets – limited, in high demand and gone in minutes.

For investors, tenants or anyone just curious about the market: the lesson is simple. If your space isn’t on a prime street, in a lively arcade or doing something food or experience-related, it might be a while before someone notices. Meanwhile, the good spots are getting scooped up faster than a free coffee at Pitt Street Station.