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.
Whilst restrictions on people movements have been relaxed in most states and territories, towards the end of December, parts of Sydney introduced measures to limit people movements and gatherings, thereby impinging on retail spending.
In spite of this, as well as the considerable uncertainty surrounding future spending behaviour when the Government’s subsidies run their course, the attractive valuations, both in absolute and relative terms, have served to underpin the appeal of commercial retail assets. With deals dominated by quality assets, cap rates have also started to fall and are little changed from a year earlier, while the price paid per square metre is considerably higher.
Whilst restrictions on people movements have been relaxed in most states and territories, towards the end of December, parts of Sydney introduced measures to limit people movements and gatherings, thereby impinging on retail spending.
The Data App (TDA) estimates the value of shopping centres transactions across Australia in the three months to December was down 36% on a year earlier, but is now higher than the 12-month average.