Top shopping centres defy retail gloom
The top echelons of Australian shopping centres are defying the retail gloom, producing strong growth sales in the face of an industry-wide slump driven by sluggish department store sales and the collapse of a series of fashion retailers.
But the country’s best centres are switching towards luxury and technology retail, leisure precincts and specialty services to drive up income and draw in new customers and tenants.
The Shopping Centre News ranking of 98 centres on its Big Guns — those with a gross lettable area of more than 50,000sqm — showed they are anchored by major department stores, Myer and David Jones, along with discount stores, Big W, Kmart and Target, and most have both major supermarkets, Coles and Woolworths.
Commercial Insights: Subscribe to receive the latest news and updates
Retailers have battled falling house prices, increased competition from online retail, stagnant wage rises, and a fall in consumer confidence but the top centres performed well.
The 81 centres assessed comprise a total GLA of 7.4 million square metres and accounted for $46.4 billion in retail sales last year.
The top centre in terms of total annual turnover, Vicinity Centres and Gandel-owned Chadstone in Melbourne, became the first in the country to reach the $2 billion mark, with its turnover of $2.135 billion a 10% increase on last year. Sixteen of the top 20 centres showed an increase in moving annual turnover. Notably, Scentre Group’s Westfield Chermside’s MAT performance was up 10.2%; Westfield Sydney, 5.8%; and Westfield Bondi Junction, 4.7%.
This was broadly reflective of the sector as a whole. Of the four centres in negative territory, two were less than -1 per cent and two less than -2.5%.
But more indicative of a centre’s performance is its turnover per square metre. On that basis, the top performer was GPT’s Melbourne Central which leapt by 12 per cent to take it to $14,763 per square metre. The Melbourne property just pipped Mirvac’s Broadway shopping centre in Sydney ($14,405 per sqm) which had held the top spot for the past six years in a row.
SCN publisher Michael Lloyd said the industry was among the best performers in the world, and showed resilience to the unfavourable economic conditions as a direct result of the superior performance of their managers.
Sales per square metre of the specialty stores in these centres — all shops with an area of less than 400sqm — was dominated by Westfield Sydney, which had sales of $23,389 per square metre, followed by Chadstone at $18,695 per square metre.
This article originally appeared on www.theaustralian.com.au/property.
