Retail landlords Stockland and Mirvac said they have delivered improved sales in their retail portfolios.
Stockland posted comparable MAT growth of 2.6 per cent for the 12 months to September 30, including 3.5 per cent growth in majors, driven by the strength in supermarket sales.
“We also achieved comparable specialty sales approximately 9 per cent above the Urbis benchmark in the 12 months to September 30 at $9,462 sq m,” said Mark Steinert, Stockland managing director and CEO.
According to Stockland, the improved sales on its retail town centre reflects remixing to growth categories and reduced supply of new retail space in their trade areas, as the portfolio further rebalances towards non-discretionary and low-discretionary spend.
Steinert said over the coming months, they will finalise the remaining settlements from $505 million of exchanged non-core retail divestments and will continue to focus on improving future income resilience by ensuring rents are sustainable; through repositioning and placemaking initiatives; and remixing tenancies to reflect consumer trends around convenience and experience.
“We reiterate our expectation that overall retail town centre comparable income will grow moderately through FY20 and improve further in FY21,” he said.
Steinert said the company’s logistics portfolio has almost doubled in size since December 2013, and continues to perform strongly as they up-weight their exposure to the asset class through development and strategic acquisitions.
Last week, the company entered into a conditional agreement with the Fife group to purchase two income-producing logistics assets in Brisbane’s prime industrial zone, at Carole Park and Richlands with an end development value of approximately $140 million on a yield of around 6 per cent, including an 18 month rent guarantee on any unlet space.
“We also entered into a joint venture with the Fife group to consolidate current landholdings in western Sydney for future development of a $500 million, 71 hectare logistics estate, subject to zoning and development approval,” Steinert said.
“This strategic acquisition will build on the eight existing logistics assets we have in the western Sydney area, positioning us to leverage the investment boom generated by the Western Sydney Airport development.”
Stockland reaffirmed its outlook for the period, noting that while current market conditions remain mixed, fundamentals are positive with steady employment growth, record low interest rates, recent tax cuts and high investment in infrastructure.
The company said some uncertainty remains, being driven by a number of factors including constrained credit availability, weak consumer sentiment and global trade conditions.
Mirvac maintains momentum in FY19
The Mirvac group said its retail portfolio continues to post solid results, notwithstanding structural and cyclical challenges in the retail sector.
The company said they maintained high retail occupancy of 99.1 per cent and recorded solid comparable moving annual turnover sales growth of 2.6 per cent and comparable specialty sales growth of 20 per cent.
It has achieved comparable specialty sales productivity of over $10,000 per sqm on specialty occupancy costs of 15.6 per cent and executed 99 leasing deals across approximately 14,000sqm with leasing spreads remaining positive.
“We are committed to continually enhancing the experiences of our retail customers in a way that’s tailored to the unique communities of each of our urban centres,” said Mirvac’s CEO and managing director Susan Lloyd-Hurwitz. “We understand that our customers are looking for welcoming, interesting places to visit, explore, discover and spend quality time with their families and friends.”
For the period, Mirvac has commenced construction of a new $9 million dining destination known as the Hall Street Dining Precinct at Moonee Ponds, Victoria. Inspired by Melbourne’s iconic laneways, the new look precinct will incorporate alfresco dining areas and spaces for community entertainment, catering to the area’s rapidly growing and diversifying population. It is due to open in November this year.
Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.