Property owners shopping for some good news
Clothes, shoes, eating out and takeaway food have had cash registers ringing, helping Australia’s retailers nudge up a 3.6% increase in turnover in the past year.
Australian Bureau of Statistics figures released this week also show a 0.5% rise in sales in October following a 0.9% rise in September.
At the same time, a new CBRE report shows that while shoppers are spending slightly more money, most of that extra is going into food retailing.
But CBRE’s Australia Retail Marketview suggests improving retail sales will start to filter through to the retail real estate market.
It also said landlords needed to consider the retailers’ “lower profitability environment” when negotiating leases.
Gorman Commercial Managing Director Stephen Gorman said many retailers were still doing it tough – particularly in shopping strips.
“Tenants’ rents have doubled in the past 10 years and their profits haven’t,” he said.
But Mr Gorman said there was reason for cautious optimism about the retail property market.
“We are seeing more activity in terms of sales of properties than last year,” he said. “There are no records (being set) but it has been activity.”
Australian Retailers Association executive director Russell Zimmerman said good weather had an impact on sales.
“We experienced a taste of summer during October, and the welcome change in weather encouraged consumers to become a little more social and visit their local cafes and restaurants,” he said.
The CBRE research shows an extra 1.5 million square metres will be added to Australia’s retail supply in 2014.
Australia Retail Marketview also shows malls are the destination of choice for Australia’s regional shoppers, with owners refurbishing existing space and adding floor space.
“Not only will refurbished developments attract the best global retailers, but it is also thought that given the increased foot traffic and higher sales environment of a regional centre, that domestic retailers will follow suit,” the report notes.