DEMAND FOR RETAIL PROPERTY IS RUNNING HIGH

Retail Shopping Centre

The retail sector in Australia over the last 6 months has been very busy with a number of asset sales and a lot of leasing activity.

According to a recent report by JLL, “the retail investment market hit a new high in 2015, reaching $8.4 billion of investment activity, representing a fourth consecutive record year, broad-based activity across all retail sub-sectors, with sub-regional shopping centres being the standout performer”.

Experts suggest that the reasons for the increased activity include:

  • the weaker Australian dollar
  • a decreased in on line sales
  • consumers demand for services

The third point is very interesting. Commercial tenants who offer services that cannot be purchased on line (eg hairdressers / nail salons) appear to be doing especially well.

Mr Stephen McNabb, CBRE head of research Australia, recently considered how retailers and landlord have adapted to changing consumer behaviors (ie advancement of online retailing & preference for international retailers) in the last few years.

“The results of these investments are beginning to pay off, with market analysis revealing that the share of online dollars going to traditional retailers has significantly increased in the past five years,” Mr McNabb said.