International retail wave only just beginning
The international assault on Australia’s retail market is set to scale new heights, with one report predicting overseas brands could open as many as 1800 new stores here over the next five years.
A CBRE Viewpoint report suggests up to 1.6 million square metres of retail space could be sought by foreign retailers between now and 2021 as the fight for a share of our booming retail dollar heats up.
And one expert says we can expect to see some new players amongst the brands snapping up our shops.
While the influx of big-name luxury retailers may start to slow as they reach their store targets, according to CBRE’s Pacific Retail Occupier team Tim Starling, smaller brands will almost certainly pick up that slack.
“Over the next five years, we expect mid-range fashion and specialist clothing brands to show a rising contribution to brand entry rates in Australia and New Zealand,” Starling says.
“These retailers will have a more wide-ranging impact than the luxury brands, as they tend to focus only on CBD or prime regional centre locations.
The Chanel store on Melbourne CBD strip Collins St.
The report says foreign brands have just 28% market penetration in Australia, as opposed to the 45% they enjoy in other Asia-Pacific countries like China, Singapore and Hong Kong, highlighting Australia’s potential for growth.
CBRE head of research, Australia, Stephen McNabb says Australians have created a perfect storm for overseas brands.
“Another market driver has been Australia and New Zealand’s consumption per capita, which has grown at twice the rate of the U.S. over the past decade,” McNabb says.
“This has contributed to the sales productivity of some international brands being among the highest in the world which, coupled with low international brand penetration rates, is making this region highly attractive.”
The arrival of major brands such as Uniqlo and H&M has already had a significant impact on CBD rents, the report says, and has also driven redevelopments at regional shopping centres as well as the construction of new retail precincts.
