Food a winner for Australian shopping centres
Food-based retailing strategies continue to be top of mind for shopping centre managers looking to improve the performance of their centres a survey released by real estate giants Jones Lang LaSalle (JLL) has revealed.
Richard Fennell, head of Property at JLL, said managers are changing their centres to ensure they include food-based retailing, along with other services like doctors and travel agencies.
“Shopping centre owners are reconfiguring and refurbishing centres to provide upgraded and expanded services to attract customers,” Fennell said.
According to JLL, retail vacancies in neighbourhood shopping centres which strongly feature food-based and non-discretionary based retailing, increased in the first six months of 2017 to 3 per cent vacancy. The vacancy rate does however remain below the long-term average of 4.5 per cent.
Sale growth expected
The JJL survey also found shopping centre managers are slightly more confident in sales growth with 53 per cent of respondents expecting some sales growth in the year ahead. This is up from 47 per cent in February 2017.
Most respondents however expect growth to be no more than 3 per cent per annum.
JLL Director of Strategic Consulting, David Snoswell, said nationally consumer sentiment has been weak for an extended period of time.
“20 per cent of respondents to our survey said they expected a decline in sales turnover in the next 12 months and gave a range of reasons for this, including strong competition in the catchment they operate in, the loss of a key tenant and the need for the centre to be refreshed/refurbished,” Snoswell said.
“When we asked shopping centre managers what factors were impacting turnover performance, competition from other centres remained the key area of concern (with a net balance of -38%), followed by online retailing (-25%) and the economic outlook (-23%).
“In contrast, the most positive factor for trading performance continues to be changes to the tenancy profile of centres to improve performance.”
JLL provides services in real estate and investment management.