In spite of the prominence of marquee international brands and national chains, over one third of retailers in Australia’s largest 31 shopping centres are small independents, according to a new study by the PAR Group.
With the diametrically opposing forces of various financial stimuli, lockdowns and restrictions on physical movements, the Australian monthly activity indicator (MAI) has exhibited both large and volatile movements since March last year.
After dwindling through the course of 2020, investment activity in Australia’s commercial retail property market picked in November and December, according to the latest findings from The Data App. Even though the number of transactions, on three-month average, remains well down on a year ago, December posted a marked upturn. Consequently, transactions are currently close to their long-run average.
After rebounding strongly in July and August, TDA’s Monthly Activity Indicator (MAI) was virtually flat in September and declined by a modest 0.2% in October; no doubt impacted by the residual effect of the Victorian lockdown. As a result, the annual rate of growth moderated slightly to be below its ten-year average.
Investment activity in Australia’s commercial retail market picked up during November. While the three-month average is well down on a year ago, the month of November recorded the highest number shopping centre transactions for the year. Transactions were dominated by large format and convenience-based stores.
Record growth in online spending, brought on by the COVID 19 pandemic, could see 20% of current sales in Australia’s largest 31 shopping centres move online. As a result, asset values could potentially fall in the order of 30%, according to a new study by the PAR Group.
After rising strongly in both July and August, The Data App’s (TDA) Monthly Activity Indicator (MAI) for Australia fell marginally in September, as restrictions placed on movement and activity in Victoria took hold. Following on from the 0.8% increase posted in August, the MAI declined 0.1% in September, thereby breaking a run of two consecutive monthly increases. The annual rate of growth moderated to be below its ten-year average.
Even with the lifting on some domestic travel restrictions and the opening up of Victoria, economic and financial uncertainty continue to weigh on the retail sector. In particular, it is unclear how consumer spending will react to the paring back of personal and business subsidies, how some retail businesses will survive, let alone their willingness or ability to pay rent. To all this can be added the reduction in footfall being experienced in city centres which is crimping trade in inner city stores.
The monthly activity indicator (MAI) for Australia, after surging in July, slowed dramatically in August, as tighter restrictions in Victoria started to take hold and also impact the broader economy. Following on from the largest monthly rise on record in July, the MAI moderated in August, rising by 0.8%. Even so, the annual growth rate remained in positive territory.
With tighter mobility restrictions only slowly being lifted in Victoria, the impact of Covid-19 has continued to weigh heavily on both the commercial retail sector and the wider economy in general. So, with restraints on physical movements coupled with the health incentive to stay at home, on-line shopping has continued to fill the void.
Consequently, in some areas of the country it has not been possible to market assets, while the temporary closure or shutdown of some stores has made valuations virtually impossible, thereby crimping transaction activity. This has meant transactions are significantly down on a year earlier but have improved marginally from the previous month.
