Commercial Property

Transactions strong, but with signs of a moderation

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Reflecting the usual seasonal lull at the start of the year, shopping centre transactions came off their record highs posted at the end of 2021. The Data App estimate, despite a relatively high number of transactions in January alone, in the three months to January the volume of transactions was very little changed from a year earlier. Similarly, the volume and value of transactions came off their all-time high but, nonetheless are well up on this time last year. So, despite a seasonal easing, the overall picture is one where the demand for shopping centres remains robust.

Another All-Time High For Shopping Centre Transactions

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In spite of the growing uncertainty surrounding the impact of the omicron coronavirus variant on economic activity in general and retail spending in particular, shopping centre transactions maintained their strong momentum as the year drew to close. The Data App estimate the value of transactions reached an all-time high, for the three-month average to December, at over $2.3bn. This surpassed the previous record set in November. On the same basis, the volume of space transacted (GLA) also reached a new peak. By all measures, despite a slight moderation, shopping centre transactions remained strong as the year came to an end.

Record Breaking Shopping Centre Transactions

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The surge in shopping centre transactions, which started in the second quarter of the year, continued unabated through October. The number of shopping centre transactions, according to The Data App estimates, reached an all-time record high in the three months to October. On a similar basis, the volume of shopping centre gross lettable area (GLA) transacted is the second highest on record.

Pandemic-Proof Shopping Centre Transaction Boom

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Irrespective of the uncertain outlook for retail spending, large areas of the economy continuing to experience restricted physical movement, as well as numerous retail outlets closed, the surge in shopping centre transactions continued in September. Indeed, The Data App estimate the current number of shopping centres changing hands, in the three months to September, is the strongest since the transaction boom towards the end of 2017. Needless to say, both the volume of shopping centre space and the value of assets transacted are also strong and significantly higher than a year earlier.

Shopping Centre Transactions Boom

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In spite of vast swathes of the country experiencing varying levels of lockdown, as well as many retail outlets closed, a very strong level of shopping centre transactions continued unabated in August. The upswing in the number of transactions, which commenced in April this year, has also seen a surge in both the value and volume of shopping centre transactions. The Data App estimate, in the three months to August, the number of transactions is over three-fold higher than a year ago, while the value of transactions, touching close to $1bn over the same period, is the highest since January 2018, thereby predating the pandemic.

Working From Home is not a Free Lunch

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The move to working from home, extenuated by the COVID 19 pandemic, could have a dramatic impact on both the number of office workers and retail spending in Australia’s CBDs.
Assuming, on average, workers spend one day a week working from home, this could result in close to one million fewer office workers making the daily commute each week, which would potentially see over $700 million dollars of lost annual retail spending across Australia’s six largest capital cities. This is according to a new study by the PAR Group, an independent property research collective.

The Boom In Shopping Centre Transactions Continues For Now

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Shopping centre transactions continued to boom in the three months to July, thereby maintaining the strength witnessed last month. Consequently, transactions are significantly higher than a year earlier, when Covid-19 had taken hold and activity was stalling. The latest estimates from The Data App show the average number of transactions in the three months to the end of July remained over twice as high as a year ago.

Commercial Retail Property Sales Boom

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Shopping centre transactions reached a multi-year high in the three months to June, having slumped when the corona virus took hold around eighteen months ago. As the quarter drew to a close, with the corona virus apparently more under control and the vaccine rollout progressing, shopping centre transactions continued to strengthen. The latest estimates from The Data App show the average number of transactions in the three months to the end of June nearly three times higher than a year earlier.

Commercial Retail Transactions Continuing to Trend Higher

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Even though the number of shopping centres transacted in May was well down from the dizzy heights posted in April, they are still up on May last year. The latest estimates from The Data App show the number commercial retail property transactions in the three months to May up over 80% compared to a year earlier, as the Covid-19 induced slump in shopping centre activity has gradually waned.