The pace of first time international brand entrants and expansions in Australia has continued, with openings or leases secured on more than 30 new stores, according to research conducted by CBRE.
This compares to over 35 new openings and lease deals for the full 2014 calendar year, as found in CBRE’s Q3 2015 Retail MarketView.
Sydney and Melbourne saw the highest levels of activity in 2015, followed by Brisbane and Perth said CBRE’s senior research manager, Danny Lee.
“Foreign brand penetration in Australia is fairly low in comparison to other countries at 28 per cent, which is a key attraction for these offshore retailers,” said Lee.
“It would take an additional 50 brands to enter the market to reach the same level as some Asian countries, such as Singapore and Hong Kong, with 90 more required to reach the UK’s level of 57 per cent.”
CBRE’s head of retail tenant representation Australia, Tim Starling, said the low penetration rate in Australia served to minimise competition between foreign brands.
“Zara’s Sydney and Melbourne CBD stores ranked highly among the company’s best worldwide traders for the group in their first year of operation and continue to be in the top 10 list. H&M has also seen recent success with their new Australian stores, achieving the second highest sales per store across the group in 2014,” said Starling.
CBRE’s head of retail brokerage leasing Australia, Leif Olson, said the entrance of foreign retailers has helped support CBD rents, with a key driver being the luxury sector.
New supply is another key feature of the CBD retail landscape, with 57,000sqm of space under construction nationally and a further 111,000sqm of space in the pipeline. “CBRE’s Retail MarketView identifies super prime and prime rent growth of 0.7 per cent and 1.0 per cent respectively in Q3, 2015, bringing annual rental growth to 13 per cent and six per cent respectively,” said Olson.
“Given the demand from foreign retailers and improving performance of domestic retailers, the majority of retail developments are likely to proceed.”
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