This article is from the Australian Property Journal archive
DEPARTMENT store retailer Myer has decided not to renew its lease at CFS Retail Property Trust’s $266.5 million Forest Hill Chase shopping centre in Melbourne’s eastern suburbs, when the lease expires next year.
Myer CEO Bernie Brookes also did not rule out further store closures at other locations, as the company delivered weaker sales results for the half year.
Myer’s lease at Forest Hill Chase expires in FY12, the retailer is one of the anchor tenants at the three level regional shopping centre, along with Big W, Target, Hoyts, Coles and Woolworths supermarkets.
The department store’s lease represented 7.9% of the space at the 57,767 sqm centre.
“We have taken the decision not to renew the lease of the Forest Hill store, which will be closed in FY2012. Forest Hill is a small store with a limited range and our MYER one data indicates that many customers in its catchment area choose to shop at the larger Myer stores located nearby at Doncaster, Chadstone, Eastland and Knox City,” Brookes said.
Myer’s decision not to renew will put added pressure on CFX, which has to renegotiate 22.7% of leasing expiries in FY12, 23.9% in FY12 and 18.4% in FY14.
Meanwhile Myer revealed that total sales for the 52 weeks to 30 July 2011 were $3.15 billion, down 3.8% compared to last year. On a like-for-like basis sales were down 5.5%.
Brookes said throughout 2011, the retailer experienced unprecedented challenging retail conditions.
“The tough trading conditions experienced from November 2010, exacerbated by the floods in Queensland and Victoria, continued into the second half.
“The consumer continues to be reluctant to spend in the face of a number of increased cost of living pressures, the imminent imposition of new taxes, uncertainty surrounding interest rates and an increased propensity to save,”
“During the second half of the year, domestic and global political and economic uncertainties as well as rising unemployment further impacted consumer confidence,” he continued.
Brookes said the challenging sales environment makes guidance very difficult.
“Assuming trading conditions do not deteriorate further, we anticipate FY2012 sales to be flat and NPAT to be up to 10% below FY2011 of $162.7 million.
“Global and domestic economic conditions will dictate when consumer confidence returns to more normal levels. Myer is very well positioned to benefit from any improvements in discretionary retail conditions when they occur,” he concluded.
Australian Property Journal
