New era centres to benefit from state retail outlook
The new wave of shopping centre openings across Queensland comes as a recently released report from LJ Hooker Commercial forecasts the state’s retail turnover to outstrip the national average.
LJ Hooker Commercial’s Retail Market Monitor
forecasts average annual growth of 3.5% until 2021, a marked improvement on the 1.1% recorded over the last year.
Newly opened centres including the $400m Westfield Coomera and $65m Hope Island Marketplace, as well as recently renovated super-regionals - Indooroopilly, Westfield Chermside, Pacific Fair (Broadbeach) and Grand Central (Toowoomba) - are expected to be immediate beneficiaries of increased spending triggered by Queensland’s activation of mining projects, tourism and population growth have underlined the forecast.
According to the Australian Bureau of Statistics, Queensland welcomed an additional 83,300 residents in the 12 months to the March quarter. The figure represented a 1.7% increase in new residents, the second best performing state behind Victoria.
LJ Hooker Commercial Gold Coast Principal Anna Tooma said the new centres focused on the new wave of experiential retail, designed in response to online spending trends.
“I think Westfield Coomera, in particular, nails that new breed of retail shopping centre,” said Mrs Tooma.
“It’s less about the utility of shopping – online buying has taken care of that - and become more about the experience.
“Centre investors have shifted their mindset: the mix of boutique or specialty stores is now as important as the anchor (tenant). Gymnasiums, childcare, medical centres, high-end restaurants – they’re all being incorporated now.
“We’re now seeing major centres mimic the high-street (experience). National supermarkets and department stores are reducing the number of stores they have or are taking smaller footprints, off-setting smaller presences with more online access.”
It was a trend which Mrs Tooma said was transcending the various retail centre offerings. She said neighbourhood centres – which the Monitor
noted were outperforming sub-regional centres in yields 6.4% to 6.6% - were also at a turning point.
“Neighbourhood centres are going to move more toward convenience services and you might find less national brands in there.
“Ten to 20 years ago, there was a big movement of young families coming to South East Queensland, and now the grandparents are moving here, wanting to be closer to the grandchildren. Their requirement for medical attention is going to make GP clinics regular fixtures of the region’s neighbourhood centres.”
The recently released Monitor
examined the challenging nature of regional and strip retail in the face of rising online spending and wider economic influences. The Monitor
forecast retail turnover to trend higher over the coming three years but remain subdued in historical terms as jobs and wage growth remained stagnant.
Although the nationwide value of retail transactions reached $10 billion over FY17, the sum was influenced by a handful of large transactions, said LJ Hooker Commercial Managing Director Mathew Tiller.
Amongst the backdrop of structural change, Mr Tiller urged landlords and tenants to work collaboratively to address the shared challenge of e-retail.
“Retail landlords who want long-term security need to be thinking about experiential tenants who are going to best succeed with experiential services and that means being accommodating in fit-outs and repurposing,” said Mr Tiller.
“Discount department stores and the like are already reviewing their strategies, shifting to smaller retail footprints and embracing e-retail.”
also found that yields were at risk of softening as bond rates rose.
“Landlords seeking low yields will be looking to divest over the coming 12 to 24 months. We could see listings loosen up over the period.”
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