Stockland is outperforming and footfall for its centres appears to be holding up better when compared to its rivals. Picture: AFP
Shoppers are heading back into malls, but not at the same rate as before the coronavirus struck and smaller convenience-style shops are beating out larger regional centres that were traditionally at the top of the property tree.
Landlords have flung open their doors to trade, but few customers are coming, partly as the recession bites and entertainment options remain limited.
Mall footfall data from Google showed that property company Stockland, which is perhaps best known for mid-level town centres, has outperformed its larger mall rivals including Westfield owner the Scentre Group and Vicinity Centres, that co-owns Melbourne’s landmark Chadstone Shopping Centre.
Shoppers are happy to buy necessities, but appear more reluctant to go back to destinations malls.
Analysis by Macquarie Equities found convenience-based sub-sectors had outperformed larger regional style centres, with the relatively-deserted CBD the worst-performing on footfall measures.
The data reveals a hefty overall fall on pre-COVID levels, with a decline in national footfall of between 2% on measures produced by ShopperTrak and 16 per cent on Google Mobility Trends.
Convenience is the “place to be” says Macquarie’s Stuart McLean and Darren Leung.
Footfall in smaller neighbourhood and subregional assets has not deteriorated as much as in more destinational assets. CBD assets were also hurt by falls in tourism and the lower current CBD workforce.
Portfolio exposure
This would be a headwind for portfolios with relatively larger exposures to this category, including GPT, which owns Melbourne Central, and Mirvac that has assets including Broadway, as well as malls owned by Vicinity Centres.
But Stockland is outperforming and footfall for its centres appears to be holding up better when compared to its rivals. “We believe this is driven by the relative convenience nature of its assets,” the Macquarie analysts said.
A limitation of the data is that the historical average footfall used by Google is based on a moving average. Macquarie cautioned this could have the effect of recent footfall readings appearing artificially elevated and closer to pre-COVID levels than in practice.
Roy Morgan track unique mobile devices and its data suggests footfall at more convenience-based assets, like Stockland’s Balgowlah centre in Sydney was off by 12 per cent against pre-COVID levels, which is far more resilient compared to larger assets, like Westfield flagship Bondi Junction that dropped by 30%.
Westfield Bondi’s footfall has also not recovered as much as Melbourne’s Chadstone, although the difference is only minor.
Of the large regional shopping centre assets, Melbourne’s western suburbs centre of Highpoint has consistently seen the largest reduction in footfall and remains at 30% below pre-COVID levels.
Deloitte Access Economics said this week that Australian retailers were facing the fight of their life in 2020 as real retail turnover growth was expected to fall 1.4% in 2020, making it the worst year on record.
“Consumer confidence slumped for a period, job losses have soared, and spending behaviour has been tipped on its head. The easing of restrictions and large fiscal stimulus program provide some support, but retail is likely to face headwinds on the long recovery path ahead,” Deloitte said.
