Global retailers set sights on Down Under: CBRE survey

Global retailers set sights on Down Under: CBRE survey
Global retailers set sights on Down Under: CBRE survey

Australia offers a lot of untapped potential for global retailers, with a new survey highlighting that less than a third of major retail groups have a presence here and many wanting to set up shop Down Under.

Australia ranked 31st of the 61 countries surveyed on the penetration of global retailers in CBRE’s “How Global is the Business of Retail?”.

The rankings were topped by the UK, with 57.5 percent of international retailers present, followed by China (56.9 percent) and the United Arab Emirates (59.3 percent)

In contrast, just 28.7 percent of the retailers surveyed have a base Down Under.

CBRE national retail director Alistair Palmer said the results point to the opportunity for global brands in the Australian market.

“While global retailers have increasingly targeted Australia, the penetration rate is still very low,” Palmer said.

“What we have seen is a considerable shift over the past five years in the types of brands targeting this market and the level of interest in new opportunities. This is expected to translate to a considerable uptick in offshore leasing activity in the short to medium term.”

The retailers were selected based on a variety of sources including surveys or retailers’ turnover and brand presence, global and national retail directories and the views of the local CBRE professionals on the dominant retailers in their markets. From these sources, 334 leading international retailers were identified as representatives of the global retail community. For each of the retailers in the sample, research was undertaken to identify whether they had a presence in each of the 61 countries and 191 cities included in the study.

CBRE’s Australian head of retail tenant representation, Tim Starling, said the focus on Australia had most recently been highlighted by Decathlon, one of the world's largest sporting goods retailers.

Decathlon has an online presence in Australia with at least 30 stores to follow.

TJX, more commonly known as TJ Maxx in the US, has also established a beachhead in Australia after acquiring the 35-store Trade Secret chain.

“TJX is a Fortune 500 company that is recognised as one of the world’s leading retailers,” Starling said.

“They have ambitions for 200 stores in Australia, encompassing several brands, with CBRE assisting in their Trade Secret roll out.”

Palmer said the success of the St Collins Lane redevelopment in Melbourne had been another litmus test of international retailer interest in Australia, with the project attracting international brands such as Sandro, Maje, Reiss Kooples, Zadig and Voltaire.

CBRE says it was involved with the first deals here for Zara, Uniqlo, Microsoft and Tesla.

The How Global report says that 19 percent of retailers surveyed intend to expand into Australia – a high proportion, given that Australia accounts for just 2 percent of the world economy.

High consumption per capita, rising tourism levels and the lower AUD are all driving demand, which is in turn pushing up retail rents given a lack of available space in the major CBD markets, it said.

Fashion retailers (encompassing luxury, mid-range and specialist clothing brands) dominate the list of retailer intent of expanding into Australia, with a high percentage of these seeking 101-250sqm of space.

London has retained its number one spot in the city rankings, with 57.9 percent of international retailers having a presence there. Dubai was hot on the heels with 57 percent, closely followed by Shanghai (54.4 percent) and New York (46.6 percent). 

Singapore and Moscow were joint fifth with 46 percent of retailers present.

Sydney was the top Australian market at 65th place, followed by Melbourne at 78th.

Hong Kong was the top market for new entrants, attracting 73 new brands, up from 58 in 2014. Singapore was a close second attracting 63 new brands, while last year’s top market, Tokyo, slid to third place after a slowdown in domestic demand.

Globally, Coffee & Restaurant brands (F&B) accounted for 20 percent of new entrants overall, followed by Luxury & Business Fashion (19 percent), Mid-Range Fashion (18 percent) and Specialist Clothing (17 percent) retailers.

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