Retail Property Market Mid 2015
July 13th 2015 | , ABS
Retail sales were slightly disappointing in May posting a 0.3% rise. Retailers should see some benefit from the lower Australian dollar which has realigned tourism flows more in their favour – both inbound and outbound.
Retail sales were slightly disappointing in May posting a 0.3% rise. Retailers should see some benefit from the lower Australian dollar which has realigned tourism flows more in their favour – both inbound and outbound.
- By retail category, food grew by +0.7% and household goods up 0.9% over the month however clothing contracted by 0.8% and department store retail sales also fell, decreasing by 1.4%.
- By state, New South Wales led the monthly gains with a 0.7% monthly rise compared to a 0.2% gain in Queensland, a 0.1% dip in Victoria and a 0.2% dip in Western Australia.
- Large retailers continue to outperform with sales up 0.7% in the month, 6.4% growth over the year compared to a 0.5% monthly dip for small retailers with annual growth slowing to 1.5%.
- According the NAB online retail sales index, online sales fell by 0.1% in May 2015, a significant slowdown on the 1.6% growth recorded in April. Online sales are now 9.0% higher compared to a year ago. In dollar terms, NAB estimate that Australians spent $17.1 billion on online retail in the 12 months to May 2015, equivalent to 7% of spending at traditional bricks & mortar retailers.
- Melbourne’s CBD retail vacancy remains low at 3.2% which is slightly above the historical average of 3.0%. The CBD market remains supported by the growing residential population, international students and an increase in white collar employment.
- Gentrification is driving the revival of some of Melbourne’s retail strips, while others continue to stagnate under the weight of high rents and a homogenous tenancy mix. While some strips are recording 10-year vacancy level highs, some have no vacant shops in the strips. Investment appetite for retail strip opportunities remain high, with some recent transactions representing yields of between 2% and 3%.
