Reacting to the atmosphere of fear and negativity, some property specialists are trying to spread the opposite message – that the future of Australia’s retail investment sector is positive. Ben Parkinson and Rick Silberman of Savills Retail Investments say that the demand for retail-grade investment property is as strong as they have ever seen. “Despite the consistent doom-and-gloom commentary regarding the retail landscape, much of the negative bias needs to be taken with a grain of salt,
n of salt,” said Silberman, the director of retail investments at the real estate group.
He said the naysayers often failed to look at the full context.
“Every retail asset needs to be assessed on a case-by-case basis,” he said. “The retail investment market covers many subsets and is therefore much too broad to paint with the same brush.”
Silberman said that while some retail assets may be “struggling due to overexposure to fashion and discount department stores”, those with good tenant mixes in good locations were still sought after and considered secure investment opportunities.
Parkinson, Savills’ national head for retail investments, said the recent drop in interest rates to 1.25 per cent was likely to fuel property investment.
“There is a significant amount of capital from privates and syndicates looking for a home. Their money isn’t doing much in the bank and retail investment provides sound returns for these investors,” he said.
“Quality retail investment assets offer a secure cash flow, high occupancy rates and, in most cases, are land-rich assets that are suitably zoned to offer future potential – three critical factors on most wish lists for commercial real estate investors,” Parkinson said.
