This article is from the Australian Property Journal archive
HIGHER costs, increased difficulties in access to funds and change in market sentiment has stifled Queensland's buoyant retail property investment sector.
According to LandMark White’s wrap up of retail transactions ($5 million plus), the quantity of retail transactions has slowed significantly in the 2008 financial year with only 29 reported sales totalling $457 million.
This result is 50% below the 54 sales totalling $985 million reported in the previous financial year.
LMW noted that since the beginning of 2008 there only five sales of retail properties ($5 million plus).
LMW said the major contributor to the extraordinary downturn has been the change in market sentiment, high cost and difficulties gaining access to funds required for most types of purchases.
QLD like New South Wales has also seen a fall in activity from wholesale funds, property trusts and developers and in their absence, private investors have become more prevalent.
Meanwhile, neighbourhood centres continue to dominate transaction activity, accounting for 61.12% of sales up from 47.09% in the previous 12 months. The proportion of bulky goods and themed sales by value has remained similar to the 2006/07 financial year and sales of city centre retail assets increased from 7.58% to 18.48%.
On the other hand, the regional and sub-regional markets did not even make a blimp on the radar during the financial year.
Some of the highlights during the year include the sale of Waterford Plaza Shopping Centre for $21.5 million with an initial yield of circa 8%; Noosa Fair Shopping Centre on the Sunshine Coast for $41.75 million at an initial yield of 6.70%; and Woolworths Bulimba in Brisbane’s inner suburbs for $11.5 million with an initial yield of circa 6%.
Looking forward, LMW said the retail property market in QLD will continue to be challenged by the current market and economic climate.
LMW predicts there will be little if any growth expected in consumer spending for the remainder of 2008.
“Sentiment from current campaigns seems to indicate a general yield softening possibly in the order of 50 basis points.
“However with a significant number of retail assets currently being offered for sale have been provided to the market in the last few months, a clearer indication as to where the overall retail market is heading will be more evident in the coming few months,” LMW concluded.
Australian Property Journal
