Fuel prices, not online retail, top shopping centre fear list

On the positive side, store refurbishments are proving the key to getting shoppers through centre doors.

JLL’s biannual Retail Centre Managers’ Survey shows 42% of managers are generally more optimistic about the performance of their centres in terms of sales trends, tenant sentiment, foot traffic and leasing inquiry.

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“Centre managers were also slightly more optimistic about the outlook for sales, mainly due to factors within their control, such as refurbishments and tenant remix, but had a more negative view on the impact of external ­factors like e-commerce, the performance of the economy and fuel prices,” JLL head of property and asset management Richard Fennell says.

Vacancy levels in subregional centres were relatively steady in the first half of the year, increasing from 3.3% in December 2017 to 3.4%, while neighbourhood centres saw vacancies rise to 2.4%.

Centre managers reported slightly stronger interest among both national tenants and mum and dad retailers. Food and beverage leasing inquiries outnumbered those from competing categories, the survey found.

JLL director of retail research Andrew Quillfeldt says specialty retailers are struggling the most: “Centre managers also noted higher incentives were required to secure a new tenant for specialty stores, given that tenants are being more selective about where they choose to open new stores.”

Most centre managers expect some growth in moving annual turnover over the next 12 months.

Supermarkets were driving the result, with 15% of centre managers noting the strong ­performance of a supermarket within their centre. Grocery spend was the winner, with steady improvements of 3.2% in the past six months.

This article originally appeared on www.theaustralian.com.au/property.