Suburban shopping centres to spend $1bn on growth plans

10/12/2008 - 22:00

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ABOUT 236,000 square metres of extra retail space is due to come online in Perth over the next four years, according to a retail report by the Property Council of Australia (WA), with just less than half the extra space coming from new centres.

ABOUT 236,000 square metres of extra retail space is due to come online in Perth over the next four years, according to a retail report by the Property Council of Australia (WA), with just less than half the extra space coming from new centres.

The survey, prepared by the Property Council and Lease Equity, showed the amount of planned retail space was 4 per cent higher than last year's survey, while the value of development was 37 per cent lower than last year at just more than $1 billion.

The largest development identified by the survey was the extension of Lakeside Joondalup by ING Real Estate, with an extra 21,750sqm of extra retail space due to come online this month.

Extensions at The Shops at Ellenbrook, owned by the Insurance Commission of WA, and Cockburn Gateway, owned by the Perron Group, also ranked among the largest retail developments, with each adding 20,000sqm of space by 2010.

Almost 50,000sqm of additional retail space that had been proposed has been either cancelled or postponed, including centres at Kwinana, Baldivis, Bull Creek and Halls Head, as the major institutions take a battering from the global credit crunch.

Property Council executive director Joe Lenzo said the results showed some promising signs of growth in the sector.

"Irrespective of the talk of doom and gloom and problems with raising capital and finance, here you've got a sector, on survey, saying we're still growing and we're still talking about investing $1 billion in either redevelopments or new centres," Mr Lenzo said.

Private developers are undertaking almost three-quarters, or about 72 per cent, of development.

Lease Equity associate director Adam Musbah said growth was likely to come from the neighbourhood centres, with less activity at the larger end.

"The institutions are finding it increasingly difficult to raise funds. But there's a lot of mum and dad type operators out there, prominent operators, that have either the capital or the ability to undertake these developments," he said.

"They've certainly got the equity in their properties, and that's more so to neighbourhoods and to a lesser extent sub-regional. That's where I think we're going to get the growth from."

More than 70,000sqm of new space is expected to come online during 2009, including extensions to Wanneroo Central, Rockingham City, Bertram and Kelmscott shopping centres, and Raine Square and Century City in the CBD.

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