Cinemas trump books and CDs: GPT highlights top-performing retail tenants and changes retail mix

Retailers selling products that can be bought cheaply online were among the worst-performing tenants of shopping centre landlord GPT in 2012.

Annual results for the year to December include a breakdown of how various retail categories performed in GPT shopping centres.

They show that the leisure category was a very poor performer in 2012, with sales down 7.5%. This includes sellers of books, CDs and games, all of which are cheaper to buy over the internet.

The other poor-performing category was department stores, including most notably David Jones and Myer, whose recent struggles in retailing have been well-documented.

In contrast, the top-performing tenants were those offering retail services such as banks, health fund stores, repairers with sales up 7.2% in 2012.

Second best performing, other retail and mobile phone sellers, which both recorded a 6.1% rise in sales and food catering, which rose 5.9%.

Other retailing includes travel agents, lotto, automotive accessories, cinemas, and other entertainment providers.

GPT has a retail portfolio comprising 17 shopping including the recently expanded Highpoint Shopping Centre in Maribynong, Melbourne covering 123,000 square metres of retail space and Erina Fair on the Central Coast.

GPT put its 50% share in Erina Fair up for sale with a price tag of around $400 million.

Carmel Hourigan, head of investment management at GPT, says structural changes in retail spending have seen the leisure category continue to be impacted “in particular books, music and games”.

“On the positive, ‘other retail’ which includes cinemas and travel, has had another strong year at 6.1% moving average turnover growth."

To respond to the structural changes in retailing, Hourigan says GPT is changing the mix of tenants in its shopping centres by down-weighting apparel which represents a significant proportion of speciality gross lettable area and up-weighting to retail services, food Catering and other retail.

“We continue to see a number of key themes including, new concept stores, the introduction of additional international retailers, further focus on operational efficiencies as well as increased control over brand and distribution strategies by retailers.

GPT also implemented a number of digital initiatives in 2012 including launching mobile applications for both Highpoint and Melbourne Central, recording over 5,000 mobile app downloads in the first two months.

“Mobile applications for Charlestown, Rouse Hill and Wollongong Central will be rolled out during the first quarter of this year,” says Hourigan,