Perth CBD retail to improve, CBRE says
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The retail vacancy rate in the CBD has had a marginal decline amid Perth's core shopping strips showing signs of improvement, a recent report found.
CBRE today released its Australian CBD Retail Vacancy H2 2023 report, which covers the retail market in Melbourne, Sydney, Brisbane and Perth.
The overall retail vacancy in Perth’s CBD declined to 25.2 per cent in the second half of 2023, which CBRE reported to be the lowest rate recorded in two years.
In H1 2023, CBRE recorded a 25.4 per cent vacancy rate in Perth’s CBD.
CBRE reported retail vacancy in Perth’s CBD continued to trend down since the COVID pandemic peak of 26.5 per cent in H1 2022.
“The vacancy improvement was driven solely by lower vacancy in retail strips which more than compensated for higher vacancy in Perth’s retail arcades and centres,” CBRE report reads.
CBRE senior director and WA retail head Fred Clohessy said the vacancy rate in Perth CBD's strip retail centres also dropped to 24.2 per cent.
Mr Clohessy said this was driven by continued strength in Perth’s core retail strips, including the Murray and Hay Street malls, William Street, and the luxury precinct west of Murray Street Mall.
“After an extended period of relatively higher vacancy and rental correction, Hay Street Mall stabilised in H2 2023 and has shown signs of gradual improvement,” he said.
“Looking forward, Perth CBD’s retail vacancy is expected to continue to improve in 2024 driven by the city’s nation-leading return to office occupancy, Western Australia’s strong economy, tourism growth and ongoing demand for luxury products.
“Longer-term, the scheduled completion of ECU’s city campus in late 2025 will also be a key catalyst for a continuing improvement in the vibrancy of Perth’s CBD retail market.”
The average retail vacancy rate across the country has tightened nationally, according to the CBRE report.
“The return to office, coupled with increased tourism and international student inflows, has led to more foot traffic in CBDs, supporting occupier appetite for floorspace within these markets,” CBRE retail research head Amita Mehra said.