Retail focus presents a niche opportunity

THE complexities of the retail property sector have given rise to a new agency specifically focused on the idiosyncrasies of this tough market.

The city’s retail sector is starting to show signs of a mild recovery after a period of stagnation.

Projects such as the City of Perth’s malls upgrade and the launch of David Jones and Woolworths have injected new life into the retail heart of the city, according to Lease Equity directors Kym Thomason and Jim Tsagalis.

Lease Equity is a new boutique retail agency set up to meet the demand for the specialist skills required in the retail property sector.

The market for retail property in the city is showing signs of recovery, Mr Thomason said.

“It’s probably bottomed out and on the way back up,” he said.

In the commercial property sector the renewal of a number of major leases is stabilising the market, according to Mr Tsagalis.

“It [the city’s retail property market] was stagnant for a while … I believe it’s been handled poorly,” he said.

“There are still a number of vacancies on the pedestrian malls but I believe they could have been avoided.

“The city is still the prime retail precinct for WA.”

Retail property is a more complicated sector of the market for a number of reasons, including legislation and the role it plays in the success of tenants’ business.

“It’s complicated because of legislation and because the tenant relies on the location to make a living,” Mr Tsagalis said.

The make-up of the retail market in Perth also has undergone a shift.

“There has been a change in the complexity of the CBD,” Mr Thomason said.

The construction of the Woodside building in the west end of the city will inevitably spawn new retail up that end of town, he said.

“We’ve also seen the west end of Hay Street improve, obviously the west end office precinct has stabilised and, as a result, that has firmed things up,” Mr Thomason said.

Major infrastructure projects such as the Perth to Mandurah train line and the development of the convention centre add new dimensions to the city.

“They might be blue-sky projects but then so were other projects, including the convention centre five years ago,” Mr Thomason said.

“In the next six to 24 months the city will markedly improve.”

Mr Tsagalis said he recognised the potential for a niche or boutique agency specialising in retail some time ago.

“We spoke about it a few years ago and there was an opportunity to get involved with Whitford City, and we formed Lease Equity around it,” he said.

Mr Thomason said there was a significant gap in the market for a boutique operator to undertake more complicated retail property transactions.

“The proliferation of centres, complicated legislation and sophistication of retailers means the specialist area of retail needed an industry expert,” he said.

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