Competition remains the key theme impacting sentiment of shopping centre managers
Three key concerns among shopping centre managers that continue to impact on their sentiment are competition, online retailing and fuel prices, according to a national JLL Retail Survey.
The main concerns being highlighted by centre managers as impacting their future turnover performance were ‘competition from other centres’ (with a net balance of -40), ‘online retailing’ (-29) and fuel prices (-23).
Major fluctuations of fuel prices in recent months have created the issue of shopping centre managers.
JLL’s 16th Retail Centre Managers’ Survey was undertaken in February across 109 JLL-managed retail shopping centres nationally.
The most positive factors continue to be ‘changes to tenancy profile’, ‘growth expectations within the trade area’ and ‘planned refurbishment activity’.
Head of Property & Asset Management – Australia, Richard Fennell said that the key strategy for many centre managers is to provide a strong food retailing mix.
Overall tenant enquiry remains subdued, according to Fennell, however enquiry from fresh food and food catering tenants is buoyant.
He said quality food offering including cafes gives customers a reason to stay longer in centres.
JLL retail figures are showing positive signs of vacancy improving for both sub-regional and neighbourhood centres.
Neighbourhood centre vacancies improved from 3.7% in June 2016 to 2.6% in December, well below the long-term average of 4.6%
Sub-regional vacancies improved from 3.5% to 3.0% but remains above the long-term average of 2.2%.
Fennel said that with strong competition from new centres impacting some centres across the JLL portfolio, the reduced vacancy rate reported across neighbourhood and sub-regional centres was a positive outcome.”
The JLL Survey Report identified speciality fashion as being a challenging sector, particularly in larger sub-regional centres where apparel has traditionally been a significant category.
In part, the decline of this sector has been offset by a stronger focus on non-retail services such as medical centres, financial services and travel agencies.
Completions in 2017 in the major capital city markets are forecast at 416,000 square metres and this is expected to heighten competition in the retail sector.
