The continuing shift to online shopping, the impact of Covid-19 on both consumers and retailers, as well as weak underlying consumer fundamentals, has resulted in greater uncertainty of long-term retail asset values.
Therefore, it is perhaps not surprising, shopping centre transactions continued fall away in July. The Data App (TDA) estimate the sale of shopping centres across Australia declined by 55% in value terms in the three months to July to $215m; a total boosted by the $121m sale of the Melbourne David Jones store.
Whilst there are plenty of rumoured sales in the pipeline, the actual number of shopping centre transactions remains very few and far between. Averaging less than five in the three months to July, the number of transactions is some 68% lower than a year earlier. TDA estimate around 60% of the assets transacted over the past three months have either been neighbourhood or convenience centres.
With asset transactions mainly focussed on smaller retail centres, the volume of space (GLA) changing hands is similarly down on a year ago. In the three months to the end of July, the volume of space transacted is now at its lowest level since 2012.