Retail property — shops, showrooms, strip retail and neighbourhood retail centres — remains a fully available and borrowing-eligible SMSF asset class in 2026. While the residential borrowing ban has redirected SMSF capital toward commercial assets, retail property offers strong yields and long lease terms that suit the income-focused nature of superannuation investing.
Why Retail Property Suits SMSFs
- Gross yields typically 5–8% for well-leased strip retail
- LRBA borrowing still available — not affected by the residential ban
- Long lease terms with built-in rent reviews (fixed or CPI-linked)
- Tenants typically pay council rates, water, insurance and land tax on net leases
- Business real property exemption available for retail business owners
- Strata retail in strong strip shopping precincts accessible from $400,000
What to Look For in an SMSF Retail Property
- Essential services tenants — supermarkets, pharmacies, medical, childcare — provide income security
- Strong foot traffic and anchor tenant exposure reduce vacancy risk
- Net lease structures where tenants pay outgoings reduce fund management burden
- Long WALE (Weighted Average Lease Expiry) of 3 years or more provides income certainty
- Established suburban strip retail (rather than large format or enclosed centres) is most accessible for SMSFs
SMSF Retail Property — Key Numbers
| Metric | Typical Range |
|---|---|
| Entry price range | $400,000 — $3,000,000 |
| Gross rental yield | 5.0% — 8.0% |
| LRBA LVR | 60% — 70% |
| Typical lease term | 3 — 7 years with options |
| Business real property exemption | Available for retail business operators |
Finding Off-Market Retail Opportunities for SMSFs
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Frequently Asked Questions
Can an SMSF borrow to buy a shop in 2026?
Yes. The residential borrowing ban does not affect retail property. SMSF LRBAs for retail shops and strip retail remain fully available.
Can a retail business owner buy their own shop through their SMSF?
Yes, under the business real property exemption, provided the lease is at market rent on arm’s length terms.
What is a good retail property yield for an SMSF?
Gross yields of 5–8% are achievable for well-leased suburban strip retail in 2026, significantly above residential yields in Melbourne and Sydney.
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