StrongS year of trade for retail

THE retail sector has enjoyed a strong year of trade with some notable sales of property in Townsville, according to Herron Todd White.

But it has come amid ongoing challenges from rising costs and supply chain disruptions which look like continuing, the firm’s Townsville director, Jason Searston, says.

“The most concerning issues are rising costs, inflation and rising interest rates that will ultimately drive property market pressures in the later stages of 2022 and into 2023,” Mr Searston says in Heron Todd White’s November report.

“Increased shipping costs via overseas container prices have increased fourfold and in some cases are driving imbalances in the goods importation supply chain. Market commentators indicate that these supply chain disruptions will persist and increase challenges across the broader sectors of the retail market.”

Mr Searston says large format retail centres and mixed retail centres appear to be performing well with rents stabilising in the $150 to $250 per square metre range.

During 2021-22, hospitality and accommodation businesses surged with most operators indicating significant revenue upswing.

“Podium positions are still held by fuel retailing, childcare and stand-alone fast-food assets by yield comparison,” Mr Searston says.

Mr Searston says a notable sale was a 3045 square metre fully leased mixed retail asset within the Domain Central bulky goods and large format centre selling for $10m.

It showed an analysed yield of 5.57 per cent and a Weighted Average Lease Expiry of just 2.14 years. In another deal, an inner-city shopping centre, City Arcade and City Lane, sold for $45.25m with a mix of key retail tenants, restaurants, bars and James Cook University, with a full line Woolworth’s supermarket as anchor.