Turnover in the retail sector has rebounded to above pre-pandemic levels in the majority of categories, according to new research from JLL.

While turnover growth has been recorded, there has been a liquidity shortage for assets greater than $A200 million as investors show caution over the sustainability and reliability of income while the coronavirus pandemic continues to unfold.

There was also a decline in cafĂ©, restaurant and takeaway food spending in New South Wales and Victoria compared to the year earlier, which lagged “due to forced closures and social distancing restrictions”.

Clothing, footwear and accessories recovered to pre-pandemic levels at the end of 2020, however it has since declined in Victoria and Western Australia because of “short-term lockdowns in both states over the month”.

The Retail Market Overview report found majority of institutional owners announced the postponement of large scale retail developments, with many projects no longer feasible in the current retail environment.

“There is currently 567,000 sqm across 31 projects on hold, with these projects amounting to approximately $A5.9 billion,” the report claims.

While there has been an improvement in rental collections for institutional owners since the onset of COVID-19, retail rents have been declining across the majority of sub-sectors and markets over the last 12 to 24 months – the national average fell by 0.9 per cent over the quarter and 6.6 per cent in the year to March 2021.

The average vacancy rate across all Australian retail sub-sectors – excluding large format retail – is sitting at a record high of 6.9 per cent as at December 2020.

JLL also found an ongoing deterioration of re-leasing spreads, with transaction volumes totalled AUD 5.3 billion in the last 12 months, 25 per cent below volumes recorded in the 12 months prior (AUD 7.0 billion).

The low quarter of sales in 1Q21 follows AUD 2.5 billion of transactions recorded in 4Q20, equating to 54 per cent of total transaction volumes of the retail sector for 2020.