Shopping centre managers expect turnover growth for the year ahead
The majority of shopping centre managers polled for a recent survey expect turnover growth for the year ahead, with traditional bricks and mortar retail outlets, online sales and the economy as possible hinderances to future growth.
Some 55 percent of respondents to JLL’s Retail Centre Managers' Survey for February expect turnover growth in the year ahead, up from 51 percent in the previous survey six months ago, concerns remained from shopping centre managers about the economy.
JLL’s Australia head of property & asset management Richard Fennell said the big change since the August 2015 Survey was the impact of fuel prices.
"Fuel prices are at or near seven year lows, meaning the average motorist is spending significantly less on fuel and this could translate to more disposable income for other items such as retail goods and services," he said.
“However the volatility in the share market and low commodity prices are still cause for concern.
“Centre Managers continue to show concern with the economic outlook, with a net balance of -20 highlighting this as a factor that could impact turnover in 2016. Although this has somewhat diminished since the last survey in August last year where the net balance was -33.
“The most positive factors for turnover outlook highlighted by Centre Mangers in the February survey continue to be issues that are specific to particular centres, such as changes to tenancy profile, growth expectations within the trade area and planned refurbishment activity,” said Mr Fennell.
JLL Strategic Consulting director, David Snoswell said mproved speciality rental growth in both neighbourhood and sub-regional centres was a highlight in the second half of 2015 across the JLL-managed portfolio of retail centres nationally, with rents in neighbourhood shopping centres increasing by 4.2 percent in 2015 while Sub-Regional centre rents grew by 3.1 percent.
“Vacancies in Neighbourhood centre improved marginally from 3.9 percent in June 2015 to 3.7 percent in December 2015. This continues the long-term improvement in neighbourhood centre vacancies. The vacancy rate has trended down over the last 2.5 years from 5.8 percent in June 2013.
“Tenant enquiry remains positive, but only just. The last four JLL surveys have reported positive tenant enquiry levels, although respondents have become less positive over the last 12 months. By far the most common response in the February survey was ‘no change’ to the level of tenant enquiry, with 63 percent of respondents not seeing a definitive change either way in tenant interest."