This article is from the Australian Property Journal archive
SUPER suburban shopping centres such as Chadstone in Melbourne and Westfield Bondi Junction in Sydney are fashioning a new trend for luxury retailers, according to Colliers International.
Colliers’ national retail market indicator report Autumn 2010 found these super metropolitan shopping centres are wooing a growing number of luxury brand names who were traditionally located only in the CBD.
National director of retail Nathan Clark said the new trend in prime retail space being located in both city and suburban areas is supporting a wider scope for retailers to reach Australia’s growing urban population.
However he said this new trend has not meant these retailers have abandoned the CBD retail strips, like Collins St in Melbourne CBD. In fact, research shows CBD demand is indeed still strong, with record high super prime retail leasing rates being recorded in Sydney CBD, where space is leasing for as high as $16,000/sqm per annum, and in Melbourne CBD, where rates have reached $14,000/sqm per annum.
In the retail investment market, national director of retail valuation Stephen Andrew said evidence is emerging of improving conditions within the investment market.
“There are growing signs that we are at the bottom of the cycle with asset valuations stabilising for prime investment grade retail centres.
“Investment activity during 2009 was dominated by private investors, while in 2010 Colliers International anticipates to see the re-emergence of both institutional and overseas investors seeking to acquire prime grade retail assets,” he added.
Andrew expects transaction yields to remain stable for the majority of 2010, and may begin to firm towards the fourth quarter.
Research Director Nerida Conisbee said although the new super regional centres deliver a parallel offer to the CBD, demographics had shifted to deliver the required critical mass to sustain both retail markets.
“No doubt there is also sufficient capacity and opportunity for the expansion of both our CBD and Super Regional centres,” she added.
Colliers research found the resurgent level of confidence in the retail sector has been brought about by a solid Christmas trading period. Turnover volume for the combined months of December and January was approximately $40.1 billion, an increase of 2.5% from $39.1 billion in December and January in the previous holiday period.
“Now that the effect of the government stimulus payments have run their course, retail trade figures have not dropped off significantly and are still well within positive growth territory.
“We foresee that retail turnover will remain buoyant through the course of 2010, tracking slightly below the 10 year average rate of growth. These figures will be reassuring for discretionary item retailers who have recently set up shop or looking to expand this year,” she concluded.
Australian Property Journal
