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Rocking the suburbs: How shopping centres have sprung back to life

Business

Suburban shopping centres have not only survived the lockdowns but were outpacing their ‘downtown’ counterparts in Australia’s cities, according to JLL.

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The global real estate firm said there had been significant transaction momentum across the neighbourhood and sub-regional sectors around the country and reports had suggested that some local centres had managed to collect 85 per cent of rent in April and May when the lockdowns were are their peak.

The company’s joint head of retail investments Jacob Swan said the foot traffic rebound in these centres had been fast and effective as people felt confident to shop and dine out.

“Income was less resilient in regional and CBD centres in April, which were more impacted by forced and voluntary closures and restrictions, but the increase in foot traffic in the second half of May suggests the impact will be somewhat short-lived,” Swan said.

“We’re seeing pent-up demand from consumers as they now get back out to the shops.

“Discount department stores have performed well through the last few months, with BIG W having reported sales growth of 27.8 per cent in the June quarter.

“Investors are becoming more optimistic about the outlook for retail given the recent rebound in performance from a range of retailers and as economic forecasts continue to be revised up. We expect that to stimulate transaction activity through the remainder of 2020 and into 2021,” Swan said.

The comments follow a Property Council survey of the industry which showed improving confidence in the sector.

JLL believes food and beverage retailers managed to adapt quickly by using online deliveries and takeaway.

Supermarkets outperformed during the peak of the pandemic in March, with monthly retail trade growth of over 23 per cent. There was some normalising of grocery spending in April (-17 per cent) but sales were still over 5 per cent higher than April 2019.

JLL expects June retail sales figures were expected to be strong after May figures showed a jump of 16 per cent, but challenges remained for leasing and many retailers were reducing store numbers as they migrated business to the internet.

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