Victoria Strongest Performing Retail Market In 2016
According to CBRE’s latest Retail MarketView, Victoria continues to lead the Australian retail leasing market into 2017 with year-on-year growth, while the rest of the market generally remains stable.
Victoria saw a 2.5% year-on-year increase in CBD retail, a 6.2% year-on-year increase in large format retail, and was stable in shopping centres.
CBRE Senior Associate Director Zelman Ainsworth said the retail leasing team in Victoria is expecting a significant amount of movement this year from major local fashion and services businesses who have been watching the market closely over the last two years.
“Victoria retail remains in a very strong position heading into 2017, with the successful opening of the recently refurbished Chadstone Shopping Centre – the largest shopping centre in Australia, low vacancy and high rental being maintained in the CBD, and the suburban retail markets bouncing back,” Mr Zelman said.
“Lack of supply, high rents in super prime locations and an influx of consumers with the suburban apartment boom will also contribute to the growth.
“We are also noticing that more retailers are identifying online as an opportunity to create better awareness for their brands, whilst driving extra traffic into their retail shops.
“Online is no longer considered a threat but rather an enhancer to bricks and mortar shops,” he said.
CBRE Australia Senior Research Manager Danny Lee said that retail trade grew by 3.4% in Q416 which represented a slight improvement over the previous quarter.
“Potentially, we may have reached a stabilised growth level after many quarters of declining growth,” Mr. Lee said.
CBRE’s Australian retail brokerage department said international retailers continue to enter Australia, with 75 stores opening in 2016 compared to 73 in 2015.
Of the 75, 70% were expansions by existing brands with international retailers who have launched flagship stores in most Australian CBDs over the past three years, now expanding into major regional centres.
“We are continuing to see a steady stream of international luxury brands that are not represented across Australia looking to this region for expansion, particularly across the eastern seaboard,” Head of Retail Brokerage Leif Olson said.
“We expect the expansion of international brands into the suburbs will continue in 2017.”