Fuel prices drive shopping centre optimism

Shopping centres across Australia are expected to have better trading conditions this year, driven by the record low fuel prices, according to a survey by real estate services firm JLL.

The JLL Retail Centre Managers Survey, conducted last month, shows that 55% of respondents are expecting turnover growth in the year ahead.

The result was a rise from 51% in the previous survey.

“The big change since the August 2015 survey was the impact of fuel prices,” says Richard Fennell, JLL’s head of property and asset management Australia.

Tenant inquiry remains positive, but only just

“Fuel prices are at or near seven-year lows, meaning the average motorist is spending significantly less on fuel and this could translate to more disposable income for other items such as retail goods and services.”

Shopping centre managers, meanwhile, remain concerned about their turnover performance, citing competition from other centres, online retailing and the economic outlook as the top three major worries.

While the survey shows a marked pick-up in specialty rental growth over the past six months, tenant inquiries remain lukewarm.

The big change since the August 2015 survey was the impact of fuel prices

“Tenant inquiry remains positive, but only just,” says David Snoswell, JLL’s director of strategic consulting.

“By far the most common response in the February survey was ‘no change’ to the level of tenant inquiry, with 63% of respondents not seeing a definitive change either way in tenant interest.”

The survey saw increased interest in inquiries from accessories, jewellery and discount variety stores, and kiosks, but the main interest continues to come from food retailers, Snoswell adds.

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