Poor performance of cinemas and department stores hurt GPT's bottom line

Department store and cinema tenants within shopping centres owned by property group GPT have contributed to a lacklustre performance of its $5.3 billion retail property portfolio, according to its latest quarterly report.

Department stores, which anchor many of GPT’s shopping centres, recorded a 9% drop in moving average turnover growth over the three months to September 2011, with only cinemas fairing worse, with a 9.3% drop in turnover.

The poor performance of these two tenant groups closely match their performance in Westfield shopping centres, which recorded an 8.5% drop in department store sales and an 8.7% drop in cinema sales in interim results released in August.

Average turnover from mini majors also fell sharply, down 6.3%, while turnover from discount department stores fell 2.6%.

Stronger performers included supermarkets (up 2.5%) while in the speciality retail category mobile phone retailers were the stand-outs, registering a 17% increase, with food businesses also performing strongly.

Overall, speciality sales fell 0.8% while shopping centre sales were down 0.5% for the three months to September 30, 2011 compared with the same period in 2010.

GPT’s retail portfolio includes the Highpoint Shopping Centre near Flemington Race Track, currently undergoing a $300 million, 30,000-square-metre extension due for completion in 2013. New tenants will include David Jones.

The shopping centre is partly owned by GPT (16.7%) and its subsidiary the GPT Wholesale Shopping Centre Fund (GWSCF), which has a 50% stake.

CBRE revised GPT’s stake upwards from $212 million in June 2011 to $228 million while GWSCF’s stake was valued at $685 million, having been valued at $637 million.

GPT says leasing enquiries for the more than 100 new shops have been strong.

GPT chief executive and managing director Michael Cameron says while the retail sector is experiencing “considerable pressure” its portfolio has proved resilient with the occupancy rate at 99.9%.

Office occupancies are at 97.5% and industrial at 100%.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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