Shopping centre managers downgrade expectations

The Rising Sun Shopping Centre has sold in a combined deal worth $23.75 million.

Increased competition and sluggish demand has left shopping centre managers feeling bearish, according to a report released by JLL.

Only 52% of managers in 116 in centres overseen by JLL expect retail sales to increase over the next year, a drop of 3% from the company’s February survey.

JLL’s Australian head of property and management Richard Fennell says competition continued to be the biggest concern for managers, highlighting the importance of the right mix of retailers.

“I think it’s important we look at the demographics of our consumers: who are they; what are they buying; how can we reach them,” Fennell says.

The August survey was the 15th undertaken by JLL.

Stockland will sell its shopping centre in Cairns for more than $230 million.

Shopping centre managers have a gloomy outlook for the coming year.

Australian director of strategic consulting David Snoswell says the results are “less positive than our two previous surveys”.

“Economic growth was good in the first quarter of 2016, but that’s mainly due to things like exports and doesn’t flow on to retail,” he says.

A total of 46% of respondents felt “very or somewhat negative” about competition.

Snoswell says the completion of new retail developments had caught managers’ attention.

The growing reach of German supermarket chain Aldi and the discount wars between Coles and Woolworths are also contributing factors in managers’ concerns.

Despite the bearish sentiment, only 16% of respondents say they expect sales growth to fall.

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