AI shopping to boost Australia's retail centre leaders

Artificial intelligence in shopping is set to strengthen Australia's leading retail centres, according to JLL, which linked that view to a record AUD $14 billion in retail property transactions.

The property adviser said the rise of so-called agentic commerce, in which AI assistants manage purchases of standardised goods, is likely to shift more value towards shopping centres built around dining, entertainment, beauty, wellness and services. In that scenario, assets that give consumers reasons to visit beyond routine transactions would be best placed to benefit.

The argument comes as Australian financial institutions prepare to launch AI-based shopping platforms, potentially as early as June. These systems are expected to make it easier for consumers to buy commodity items online by comparing price, stock and delivery speed with minimal input from the shopper.

For retail landlords and investors, that points to a sharper divide between assets. Centres focused mainly on routine, easily replaceable goods could come under greater pressure if more spending shifts to automated digital channels. Destinations with broader leisure and service offerings may prove more resilient.

Richard Fennell, Head of Property Management Australia at JLL, said the sector has already adapted through earlier disruptions.

"Shopping centres have repeatedly demonstrated adaptability. The question isn't whether A-commerce will change retail - it will - but whether our assets can evolve to capture the experiential spending that algorithms cannot replace," Fennell said.

JLL manages 360 shopping centres and retail precincts across Australia, giving it a broad view of how owners and tenants are responding to changes in consumer behaviour. In its assessment, the strongest centres have moved well beyond their traditional role as places for one-stop shopping.

"Retail centres which survived the GFC and eCommerce will also survive A-Commerce. The local shopping centre has evolved from just a place to buy things you need in one convenient spot - the good ones are now Community Engagement and Entertainment Centres, places to go to have a good time - as well as shop," Fennell said.

Investor shift

The analysis reflects a broader reassessment of retail property by investors. After years of uncertainty over long-term office demand and ongoing constraints on residential development from planning rules, retail has regained attention from investors seeking steady income from established centres.

Kate Low, Head of International Capital, ANZ at JLL, said Australia is also benefiting from a shortage of comparable retail opportunities elsewhere in the Asia-Pacific region. That scarcity is helping draw offshore capital into the local market.

"Investors are looking for defensive yields in an environment where traditional office assets face structural challenges and residential development remains constrained by planning regulations," Low said. "For investors, the calculations involve balancing technological disruption against demographic trends, urbanisation patterns, and the proven resilience of well-located experiential retail."

Foreign participation in Australian retail deals has risen since the pandemic, JLL said, though mostly through joint ventures with domestic partners rather than outright offshore acquisitions. In 2025, 15% of sales involved some level of foreign capital across 15 transactions.

That suggests overseas investors remain interested in the sector while still favouring local relationships and operating knowledge. For large shopping centre assets in particular, domestic partnerships can provide access to market intelligence, tenant networks and asset management expertise.

Near-term risks

JLL also highlighted risks in the shift to AI-led shopping. Retailers that adopt agentic commerce platforms may lose some direct contact with customers and surrender access to valuable purchasing data. That could weaken the connection between retailer and shopper if AI intermediaries begin to control more of the discovery and buying process.

Another concern is the effect on store investment. If merchants optimise more heavily for AI-driven product discovery, physical locations in weaker centres may receive less investment. Secondary assets would be more exposed than dominant centres with stronger footfall and a broader mix of uses.

Consumer behaviour remains another open question. Security, privacy and people's willingness to hand spending decisions to algorithms could all slow adoption. Even so, JLL argued that convenience has historically outweighed hesitation once consumers become familiar with new payment and shopping systems.

The firm drew a parallel with contactless payments, which reduced friction at the point of sale and helped reshape spending habits. In the same way, AI shopping tools could become normal for repeat purchases where consumers care less about browsing and more about speed and ease.

If that happens, the retail categories most exposed are likely to be those built around standardised products with little differentiation. By contrast, categories tied to personal service, social interaction or leisure are less likely to be displaced by automated purchasing systems.

That distinction helps explain why investors are still backing major retail centres despite the spread of AI in commerce. The strongest assets are seen not simply as places where goods are sold, but as locations where people eat, meet, seek services and spend time.

In JLL's view, AI will make it easier to buy commoditised goods online, but it will not remove demand for "dining, beauty, wellness, entertainment and everyday services".