A MAJOR barrier to expansion in Perth's retail sector has been lifted with the release of the state government's draft 'activity centres policy', according to the peak industry council.
The policy, released by Planning Minister John Day last week, has been designed to replace the existing metropolitan centres policy.
A key element of the plan is the annulment of maximum floor space guidelines for retail centres.
Shopping Centre Council of Australia chief executive Milton Cockburn said the draft policy was the impetus required for growth in Western Australia's retail sector.
"[The Metropolitan Centres Policy] has been a cap on retail in general and that's why the whole thing will be beneficial for retailers and customers as well," he said.
"There have been a number of shopping centres in Perth that have been constrained by the policy for some time, and it will provide the opportunity for these sorts of expansions to go ahead.
"It won't lead to mayhem ... its not as if it's being replaced by a laissez faire policy, every development application will have to be treated on its merits, the same way it is in every other state.
"Strategic outcomes are going to be applied, but certainly a barrier to expansion has been lifted and that's a good thing."
The new policy had the potential to reduce the growth of retail rents, Mr Cockburn said.
"The reality is, in the last decade in Perth we've seen a retail boom, retail sales have grown on average by more than 10 per cent each year," he said.
"The laws of economics say if you constrain supply at the same time demand is booming, then that will have a substantial impact on the growth of rents, so if you expand supply, then that should actually have a moderating effect.
"It will result in more competition, because there will be more opportunity now for retailers to get started, more opportunity for existing retailers to expand the number of stores they've got, so the big winner out of all of this should really be the consumer."
Mr Day said the new guidelines encouraged mixed-use developments, incorporating health, education and entertainment facilities, while medium to high-density residential developments would also be integrated.
"What we're doing is planning to change the system so that commercial centres will be able to grow, they won't be limited by having maximum floorspace applied," Mr Day said.
"The focus will be on good planning and architectural design outcomes and a good mix of uses where growth occurs rather than simply having arbitrary floorspace limits as has been the case in the past."
Mr Cockburn said the previous policy had hindered growth in WA's retail environment.
"For the past decade, most of the redevelopment of shopping centres that's taken place around Australia has taken place in other states," he said.
"The policy has effectively exported jobs, both in construction jobs and full-time retail jobs, to other states."
But it wasn't just large shopping centres and malls that would benefit from the proposed legislation.
"The way the current metropolitan centres policy applies is a net lettable area capped limit on the activity centre," Mr Cockburn said.
"Once you actually reach that cap it's actually constraining all forms of retail within that centre, not just shopping centres.
"Obviously shopping centres in those activity centres are caught by it as well, but so are the strips, so are homemaker centres, so are all other forms of retail property."
© Business News 2017. You may share content using the tools provided but do not copy and redistribute.