Shopping centre sales up $100m

SHOPPING centre sales in WA have increased by more than $100 million over the past twelve months, says Colliers Jardine research manager David Cresp.

Metropolitan shopping centre transactions slumped to $57 million in 1998, while metropolitan transactions for 1999 have already reached $198.5 million.

Mr Cresp said the lull in 1998 was due to centre owners’ reluctance to sell existing retail investments as opposed to a lack of demand.

Collier Jardine’s latest retail research revealed current demand for larger shopping centres was mainly from institutions and property trusts.

However, small to medium sized centres were still in high demand from local investors and syndicates.

Mr Cresp said yields were tightening significantly as a result of the current level of demand, particularly for sub-regional centres.

“Dianella Plaza and Metro Maddington sold in 1998 for yields of 10.3 per cent and 11.5 per cent,” Mr Cresp said.

“The sale of Bullcreek Shopping Centre proved that good sub-regional centres could achieve yields of below 9 per cent in today’s market.

“This has partially been a response to strong demand and limited investment opportunities but is also a reaction to falls in ten year bonds over recent years.

“However, yields in the vicinity of 8.5 per cent to 9.5 per cent with potential for future growth look good compared to other forms of investment,” he said.

Mr Cresp said the recent recovery of the retail sector would probably continue into the new millennium.

“The retail property market is witnessing expansions to nearly all of Perth’s regional shopping centres in recent years and if smaller owners are to stay competitive they will need to plan ahead and react to market changes,” he said.

“The good news for retailers is steady population growth in WA will support increased consumer spending. However, there are other factors which could bring some down side.”

Two issues affecting the sector are proposed changes to trading hours and the Ministry for Planning’s policy statement.

The Ministry’s 1998 draft statement is in the process of being amended.

Mr Cresp said the revised statement could well provide more generalised guidelines on retail expansion and give local councils more power.

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