Perth retail floor space still growing

DURING 1999 the Perth retail property market saw one of the largest increases in retail floor space, according to Colliers Jardine Research.

With further CBD retail development under way or planned in 2000-01, the strength of the retail market looks set to continue.

Colliers Jardine research manager David Cresp said retail floor space in WA was set to increase by about 27,000 square metres in the coming year and a further 20,500 square metres was forecast to be completed in 2001.

The bulk of this was coming from both the expansion of regional centres and the development of new neighbourhood centres, as well as significant CBD activity, he said.

The completion of David Jones’ redevelopment of the Aherns store and adjoining Savoy Hotel by 2002 would add an extra 9,000 square metres of space to the CBD.

In addition, the development of around 11,300 square metres of new space at 160 Murray Street in the Murray Street Mall and the development of a Myer Megamart on the Cantebury Court site in Northbridge will further reinforce CBD retailing.

“The renewed focus that this development has brought to the CBD retail market is also likely to lead to several other redevelopments and will set new benchmarks for rents which have remained stable over the last few years,” Mr Cresp said.

The interest by investors in the sector was reflected in high sales during 1999 although sales had dropped in 2000.

Mr Cresp said about $350 million of retail property was sold.

“The activity in this sector was led by Australian property trusts, which purchased a number of major shopping centres including a 50 per cent stake in Rockingham, Bullcreek, Esperance Boulevard and Carnarvon Boulevard,” he said.

“Activity during 2000 has been much slower with the only major transaction to date being the sale of Thornlie Square Shopping Centre.”

Mr Cresp said yields had increased by around 25 to 50 basis points after tight yields during 1999.

“This is due to both the increase in interest rates as well as the increase in supply of retail floor space,” he said.

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