across regional, sub-regional and neighbourhood centres.
“While supermarket rents across all centre types remained stable, we saw rents move down for discount department stores in sub-regional centres to an average of $235 per square metre, reflecting a 3.9 per cent fall during the 12-month period to March 2019,” said Savills’ director for research and consultancy, Shrabastee Mallik.
“Interestingly, the average went down as a result of downward revisions to the high end of the range, rather than the low, in a reflection of the times. We are now at a stage of the cycle where landlords are carefully considering the levels at which they pitch their rents, Mallik said.
Savills’ national head for retail investments, Ben Parkinson, said, “As people become busier, there is a greater demand for neighbourhood centres to be a one-stop shop, with more and more local neighbourhood centres providing a streamlined non-discretionary experience.”
“Landlords are able to carefully target their rents in these centres in line with changing consumer tastes and preferences.”
Australia’s retail sector as a whole has been in a state of flux throughout the past three years, as the effects of online, large-format and specialist retailing have grown more pronounced, the report said.
“Given the vastness of Australia’s physical landscape, a relatively low shopping centre supply per person, and a lower penchant for exclusively shopping online compared to other developed nations, it is not surprising that Australia’s retail sector has been comparatively resilient,” Mallik said.
