WA retail outperforms the nation in Q1
Western Australia’s retail sector outperformed the nation in the first quarter of 2019, providing a platform for increased activity in the state’s retail investment sector.
08 May 2019
According to CBRE’s Q1 Retail MarketView, retail turnover in Western Australia recorded a 0.9% increase from the previous quarter, trumping the average national increase of 0.7%. Queensland and Victoria both recorded a 0.8% increase during the three-month period, followed by New South Wales with a 0.5% lift. South Australia experienced a 0.2% spike, while Northern Territory turnover was down 0.4%.
Investment activity in WA’s retail sector has also started strongly, totalling $91.4 million during the first three months of 2019 – representing an 8.1% increase year on year. The research also highlighted shopping centre yields have slightly sharpened from 2018, averaging 6.2%.
By comparison, investment activity nationally in Q1 totalled $623 million – down 50% on the $1.27 billion recorded in the first quarter of 2018. Investment volumes are expected to increase significantly however over the remainder of the year as investors look to reweight portfolios.
CBRE’s Richard’s Cash said expects momentum will continue to build in the state’s retail sector.
“We expect to see yields for A-grade supermarkets and neighbourhood shopping centres strengthen throughout 2019, fuelled by an influx of new buyers entering the market locally, nationally and globally,” Mr Cash said.
CBRE’s Anthony Del Borrello said there was likely to be an uptick in the amount of sub-regional shopping centre sales coming to the market as owners reassessed their exposure to this asset class.
“Demand for sub-regional centres is likely to stem from a couple of different sources – offshore groups interested in landbanking income producing assets in growing locations and value-driven retail owners, who are looking to generate income growth through active and innovative asset management.”
The next assets to test the strength of Western Australia’s retail investment market will be the sale of the former Ballajura Supa IGA in Perth and Bluff Point Shopping Centre, north of Geraldton.
A 3,042sqm former IGA supermarket within the Ballajura City Shopping Centre is being offered for sale – providing an attractive owner-occupier or repositioning opportunity. The property has a guaranteed holding income of $430,000 per annum until 2021.
The second property, Bluff Point Shopping Centre, is a neighbourhood shopping centre located north of the Geraldton town centre. Located on a 1.28ha corner site, the centre is anchored by major tenants, including Terry White Chemmart and Bluff Point Medical Centre.
CBRE Western Australian Retail Investments team has been appointed to market for sale the two properties. For Australian/international news or global stories, follow us on Twitter: @cbreaustralia
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE: CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at https://www.cbre.com.