The retail property space in Perth city is tightening up with vacancies in the CBD malls falling by more than 7 per cent while rents are pushed to an all-time high of close to $5,000 per square metres, a new report shows.
In the latest Perth CBD Prime Retailing report, Savills said the city is ushering a new era in retail, highlighted by new international luxury brands that have taken up residence along Hay Street between William and King Streets.
The report said the largest vacancy rate fall of all precincts was the CBD malls, which fell from 10.3 per cent in April to just 2.9 per cent in September.
In the general CBD area, the vacancy rate dipped from 8.77 per cent in April to 7.75 per cent in September.
"Perth's CBD retail market has entered a new era showcasing an exciting range of new retailers and developments," Savills' Perth-based national head of retail services Chris Ireland said.
"Demand for prime CBD retail space is strong, which is pushing retail rents to all-time highs with rents of close to $5,000 per sq m being achieved in some parts of the CBD.
"This has driven Perth's retail market to rents comparable with landmark eastern seaboard retail precincts, such as Queen's Plaza in Brisbane and the Sydney CBD."
The report showed that rents in the Hay Street mall currently ranges from $2,000/sqm to $4,500/sqm, with rental rates raising more than 40 per cent over the past few years.
Savills also identified 23,600sqm of new retail space currently under construction within the CBD, including Raine Square, ONE40 William and Equus, all of which are due for completion by the end of 2012.
Mr Ireland said Perth's rapidly evolving retail market reflected WA's strong population growth and renewed economic impetus from the resources sector.
"Despite the global economic downturn, Access Economics predicts WA's retail turnover is anticipated to be resilient and record 1.0% growth for 2009 and 1.9% growth for 2010," he said.
"A new wave of resources activity in the state, highlighted by the Gorgon, Wheatstone, Scarborough and Pluto projects, have also boosted consumer confidence and have positive flow-on effects on retail spending and the local retail market.
"Major infrastructure projects such as the Link and Riverside projects will also help revitalise the Perth CBD."
